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What changed in SMITH MICRO SOFTWARE, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SMITH MICRO SOFTWARE, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+192 added−161 removedSource: 10-K (2026-03-05) vs 10-K (2025-03-12)

Top changes in SMITH MICRO SOFTWARE, INC.'s 2025 10-K

192 paragraphs added · 161 removed · 122 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

19 edited+1 added−3 removed21 unchanged
Biggest changeAs such, parents and guardians must be proactive in managing and combating digital lifestyle issues such as excessive screen time, cyberbullying, and online safety; • As IoT use cases continue to proliferate and scale, management complexity, security and interoperability must be addressed efficiently and correctly; • Mobile network operators (“MNO”) are being marginalized by messaging applications, and face growing competitive pressure from cable multiple system operators (“MSO”) and others deploying Wi-Fi networks to attract mobile users; • Enterprises face increasing pressure to mobilize workforces, operations, and customer engagement, but lack the expertise and technologies needed to leverage mobile technology securely and cost-effectively; • The ubiquity and convenience of e-commerce has created the need for consumer-facing brands to reimagine brick-and-mortar retail experiences; and • The change in dynamics of work, school and home life has led to an increased use of mobile devices for work, education and entertainment which has given rise to a new set of challenges and issues.
Biggest changeAs such, parents and guardians must be proactive in managing and combating digital lifestyle issues such as excessive screen time, cyberbullying, and online safety; • As IoT use cases continue to proliferate and scale, management complexity, security and interoperability must be addressed efficiently and correctly; • Mobile network operators (“MNO”) are being marginalized by messaging applications, and face growing competitive pressure from cable multiple system operators (“MSO”) and others deploying Wi-Fi networks to attract mobile users; • Consumer service providers face increasing pressure to offer mobile software applications alongside their core service offerings to drive customer satisfaction and engagement, but lack the expertise and technologies needed to deliver user-friendly mobile solutions to meet this demand securely and cost-effectively; • Enterprises face increasing pressure to mobilize workforces, operations, and customer engagement, but lack the expertise and technologies needed to leverage mobile technology securely and cost-effectively; • The ubiquity and convenience of e-commerce has created the need for consumer-facing brands to reimagine brick-and-mortar retail experiences; and • The change in dynamics of work, school and home life has led to an increased use of mobile devices for work, education and entertainment which has given rise to a new set of challenges and issues. 5 Table of Contents To address these challenges, Smith Micro offers the following solutions: Products SafePath ®– The SafePath product suite provides comprehensive and easy-to-use tools to protect family digital lifestyles and manage connected devices both inside and outside the home.
Key Revenue Contributors In our business, we market and sell our products primarily to large MNOs and MSOs, so there are a limited number of actual and potential customers for our current products, resulting in significant customer concentration. With the launch of SafePath Global, we plan to expand our customer reach more easily to smaller MNOs and MSOs.
Key Revenue Contributors In our business, we market and sell our products primarily to large MNOs and MSOs, so there are a limited number of actual and potential customers for our current products, resulting in significant customer concentration. With SafePath Global, we plan to expand our customer reach more easily to smaller MNOs and MSOs.
ViewSpot® – Our retail display management platform provides wireless carriers and retailers with a way to bring powerful on-screen, interactive demos to life. These engaging in-store demo experiences deliver consistent, secure, and targeted content that can be centrally managed and updated via ViewSpot Studio.
ViewSpot® – Our retail display management platform provided wireless carriers and retailers with a way to bring powerful on-screen, interactive demos to life. These engaging in-store demo experiences delivered consistent, secure, and targeted content that can be centrally managed and updated via ViewSpot Studio.
First, we deployed and launched SafePath Global™, a new deployment and launch model that allows MNOs to rapidly deliver SafePath to their users with faster time-to-market, minimal reliance on MNO's resources, and easy customer onboarding.
In 2024, we launched SafePath Global™, a new deployment and launch model that allows MNOs to rapidly deliver SafePath to their users with faster time-to-market, minimal reliance on MNO's resources, and easy customer onboarding.
Human Capital Resources As of December 31, 2024, we had a total of 164 employees within the following departments: 117 in engineering and operations, 31 in sales and marketing, and 16 in management and administration. We are not subject to any collective bargaining agreement, and we believe that our relationships with our employees are good.
Human Capital Resources As of December 31, 2025, we had a total of 118 employees within the following departments: 80 in engineering and operations, 24 in sales and marketing, and 14 in management and administration. We are not subject to any collective bargaining agreement, and we believe that our relationships with our employees are good.
Marketing and Sales Strategy Because of our broad product portfolio, deep integration and product development experience and flexible business models we can quickly bring to market innovative solutions that support our customers’ needs, which creates new revenue opportunities and differentiates their products and services from their competitors. Our marketing and sales strategy is as follows: Leverage Operator Relationships.
Marketing and Sales Strategy Because of our broad product portfolio, deep integration and product development experience and flexible business models we can quickly bring to market innovative solutions that support our customers’ needs, which create new revenue opportunities for our customers and differentiates their products and services from their competitors.
Expand our Customer Base. In addition to growing our business with current customers, we look to add new MNO and MSO customers worldwide, as well as to expand into new partnerships as we extend the reach of our product platforms within the connected lifestyle ecosystem.
We continue to focus on providing digital lifestyle solutions and premium messaging services. Expand our Customer Base. In addition to growing our business with current customers, we look to add new MNO and MSO customers worldwide, as well as to expand into new partnerships as we extend the reach of our product platforms within the connected lifestyle ecosystem.
With the feature set provided by the ViewSpot platform, wireless carriers and other smartphone retailers can easily customize and optimize the content loops displayed on demo devices so that it resonates with in-store shoppers. Interactive demos created in ViewSpot can be experienced on Android smart devices.
With the feature set provided by the ViewSpot platform, wireless carriers and other smartphone retailers could easily customize and optimize the content loops displayed on demo devices so that it resonated with in-store shoppers. Interactive demos created in ViewSpot could be experienced on Android smart devices. We divested our ViewSpot product on June 3, 2025.
These solutions include location tracking, parental controls, driver safety functionality, and enhanced AI/machine learning to optimize and customize families' online experience, provide cyberbullying protection, social media intelligence, and public safety notifications for parents or guardians.
These solutions include location tracking, parental controls, driver safety functionality, and enhanced AI/machine learning to optimize and customize families' online experience and provide social media intelligence to help parents and guardians better understand their children's online world.
In 2025 we plan to deploy SafePath OS, a software solution designed to be pre-installed and configured on mobile devices to enable MNOs to offer kids phones and senior phones with key features and protections of our SafePath family safety solution out of the box.
We launched SafePath Kids in 2024 as a new and innovative implementation of our solution, which enables MNOs to offer rate plans for children with built-in protections, and in 2025 we launched SafePathOS, a software solution designed to be pre-installed and configured on mobile devices to enable MNOs to offer kids phones and senior phones with key features and protections of our SafePath family safety solution out of the box.
We continue to capitalize on our strong relationships with the world’s leading MNOs and MSOs. These customers serve as our primary distribution channel, providing access to hundreds of millions of end-users around the world. Focus on High-Growth Markets. We continue to focus on providing digital lifestyle solutions, analytics/Big Data solutions, premium messaging services, and visual retail content management solutions.
Our marketing and sales strategy is as follows: Leverage Operator Relationships. We continue to capitalize on our strong relationships with the world’s leading MNOs and MSOs. These customers serve as our primary distribution channel, providing access to hundreds of millions of end-users around the world. Focus on High-Growth Markets.
Product Development The software industry, particularly the wireless market, is characterized by rapid and frequent changes in technology and user needs. We work closely with industry groups and customers, both current and potential, to help us anticipate changes in technology and determine future customer needs. Software functionality depends upon the capabilities of the related hardware.
We work closely with industry groups and customers, both current and potential, to help us anticipate changes in technology and determine future customer needs. Software functionality depends upon the capabilities of the related hardware. Accordingly, we maintain engineering relationships with various hardware manufacturers, and we develop our software in tandem with their product development.
We continue to innovate and evolve our business to respond to industry trends and maximize opportunities in growing and evolving markets, such as digital lifestyle services and online safety, “Big Data” analytics, automotive telematics, and the consumer IoT marketplace.
We continue to innovate and evolve our business to respond to industry trends and maximize opportunities in growing and evolving markets, such as digital lifestyle services and online safety, the consumer IoT marketplace, and by leveraging advanced technologies like artificial intelligence to enhance the features and capabilities of our solutions.
Accordingly, we maintain engineering relationships with various hardware manufacturers, and we develop our software in tandem with their product development. Our engineering relationships with manufacturers, as well as with our major customers, are central to our product development efforts. We remain focused on the development and expansion of our technology, particularly in the wireless space.
Our engineering relationships with manufacturers, as well as with our major customers, are central to our product development efforts. We remain focused on the development and expansion of our technology, particularly in the wireless space. Competition The markets in which we operate are highly competitive and subject to rapid changes in technology.
Our SafePath-based solutions have traditionally been delivered to end-users as value-added services, offering new revenue streams for MNOs while helping to increase brand affinity and reduce subscriber churn. In 2024, we launched two new innovations on our SafePath platform.
Our SafePath-based solutions have traditionally been delivered to end-users as value-added services, offering new revenue streams for MNOs while helping to increase brand affinity and reduce subscriber churn. More recently, our latest innovations in the SafePath platform focus on aligning with MNO's core business - meeting them with solutions that support what they sell best.
We not only compete with other software vendors for new customer contracts, in an increasingly competitive and fast-moving market we also compete to acquire technology and qualified personnel. We believe that the principal competitive factors affecting the mobile software market include domain expertise, product features, usability, quality, price, customer service, speed to market and effective sales and marketing efforts.
We believe that the principal competitive factors affecting the mobile software market include domain expertise, product features, usability, quality, price, customer service, speed to market and effective sales and marketing efforts.
Competition The markets in which we operate are highly competitive and subject to rapid changes in technology. These conditions create new opportunities for Smith Micro, as well as for our competitors, and we expect new competitors to continue to enter the market.
These conditions create new opportunities for Smith Micro, as well as for our competitors, and we expect new competitors to continue to enter the market. We not only compete with other software vendors for new customer contracts; in an increasingly competitive and fast-moving market we also compete to acquire technology and qualified personnel.
We did not have any further revenue from this contract in 2024. 6 Table of Contents Customer Service and Technical Support We provide technical support and customer service through our online knowledge base, email, and live chat. Our operator customers generally provide their own primary customer support functions and rely on us for support to their technical support personnel.
Our operator customers generally provide their own primary customer support functions and rely on us for support to their technical support personnel. 6 Table of Contents Product Development The software industry, particularly the wireless market, is characterized by rapid and frequent changes in technology and user needs.
Second, we launched SafePath Kids, a new and innovative implementation of our solution which enables MNOs to offer rate plans for children with built-in protections, not as a value-added service but as an integral component of the MNO offering.
With our latest innovations in SafePath Kids™ and SafePath OS™, carriers can leverage the strength of our SafePath solutions to offer devices and rate plans aimed at creating a safer mobile experience, not as value-added service but as an integral component of the carrier's core offerings.
Removed
Our portfolio includes family safety software solutions to support families in the digital age and a wide range of products for creating, sharing, and monetizing rich content, such as visual voice messaging, retail content display optimization and performance analytics on any product set.
Added
Customer Service and Technical Support We provide technical support and customer service through our online knowledge base, email, and live chat.
Removed
To address these challenges, Smith Micro offers the following solutions: 5 Table of Contents Products SafePath® – Comprised of SafePath OS™, SafePath Kids™, SafePath Family™, SafePath Global™, SafePath IoT™, SafePath Home™, and SafePath Premium™, the SafePath product suite provides comprehensive and easy-to-use tools to protect family digital lifestyles and manage connected devices both inside and outside the home.
Removed
One of the Company's U.S. Tier 1 carrier customers terminated its family safety contract with Smith Micro, effective June 30, 2023, and elected to continue to receive services under the contract for a transitional period through November 30, 2023. The revenues associated with that customer contract were approximately 36% of our total revenues for 2023.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe success of our products depends upon effective operation with operating systems, devices, networks, standards, and other third party technology that we do not control and on our continued relationships with mobile operating system providers, device manufacturers, and other third-party technology providers.
Biggest changeIn the event that our AWS contract is terminated, or there is a lapse of service, elimination of AWS services or features that we utilize, or damage to such facilities, we could experience interruptions in access to our platform as well as significant delays and additional expense in arranging for or creating new facilities or re-architecting our platform for deployment on a different cloud infrastructure service provider, which would adversely affect our business, financial condition, and results of operations. 9 Table of Contents Our products depend upon effective operation with operating systems, devices, networks, standards, and other third party technology that we do not control and on our continued relationships with mobile operating system providers, device manufacturers, and other third-party technology providers.
Additionally, the securities purchase agreements we have entered into in the past, and may enter into in the future, may include certain restrictions restricts or otherwise impair our ability to obtain additional financing using certain types of transactions. It is possible that our future capital requirements may vary materially from those currently anticipated.
Additionally, the securities purchase agreements we have entered into in the past, and may enter into in the future, may include certain restrictions or otherwise impair our ability to obtain additional financing using certain types of transactions. It is possible that our future capital requirements may vary materially from those currently anticipated.
International operations are subject to many inherent risks, including: • general political, social and economic instability; • trade restrictions; 13 Table of Contents • the imposition of governmental controls; • exposure to different legal standards, particularly with respect to intellectual property; • burdens of complying with a variety of foreign laws, including without limitation data privacy laws, such as the General Data Protection Regulation (“GDPR”) in Europe; • import and export license requirements and restrictions of the United States and any other country in which we operate; • unexpected changes in regulatory requirements; • foreign technical standards; • changes in tariffs; • difficulties in staffing and managing international operations; • difficulties in securing and servicing international customers; • difficulties in collecting receivables from foreign entities; • fluctuations in currency exchange rates and any imposition of currency exchange controls; and • potentially adverse tax consequences.
International operations are subject to many inherent risks, including: • general political, social and economic instability; • trade restrictions; 14 Table of Contents • the imposition of governmental controls; • exposure to different legal standards, particularly with respect to intellectual property; • burdens of complying with a variety of foreign laws, including without limitation data privacy laws, such as the General Data Protection Regulation (“GDPR”) in Europe; • import and export license requirements and restrictions of the United States and any other country in which we operate; • unexpected changes in regulatory requirements; • foreign technical standards; • changes in tariffs; • difficulties in staffing and managing international operations; • difficulties in securing and servicing international customers; • difficulties in collecting receivables from foreign entities; • fluctuations in currency exchange rates and any imposition of currency exchange controls; and • potentially adverse tax consequences.
If we fail to comply with the requirements for continued listing on the Nasdaq Stock Market, our common stock could be delisted from trading on Nasdaq, which would likely reduce the liquidity of our common stock and could cause our trading price to decline. Our common stock is currently listed for quotation on the Nasdaq Stock Market.
If we fail to comply with the requirements for continued listing on the Nasdaq Stock Market, our common stock could be delisted from trading on Nasdaq, which would likely reduce the liquidity of our common stock and could cause our trading price to decline. Our common stock is currently listed for quotation on the Nasdaq Capital Market.
Fluctuations in our operating results may be due to several factors, including the following: • the gain or loss of a key customer; • the timing of product and services deployments to our major customers and the timing of our customers’ launch of their branded versions of such products and services to their end users; • the timing and extent of our customers’ efforts to market and promote such products and services to their users; • the timing of user acceptance of our customers’ branded versions of our products and services and the growth or decline in the subscriber base for such products and services; • our ability to maintain or increase gross margins; • variations in our sales channels or the mix of our product sales; • our ability to anticipate market needs and to identify, develop, complete, introduce, market and produce new products and technologies in a timely manner to address those needs; • the availability and pricing of competing products and technologies and the resulting effect on sales and pricing of our products; • acquisitions; 17 Table of Contents • the effect of new and emerging technologies; • deferrals of orders by our customers in anticipation of new products, applications, product enhancements or operating systems; and • general economic and market conditions.
Fluctuations in our operating results may be due to several factors, including the following: • the gain or loss of a key customer; • the timing of product and services deployments to our major customers and the timing of our customers’ launch of their branded versions of such products and services to their end users; • the timing and extent of our customers’ efforts to market and promote such products and services to their users; • the timing of user acceptance of our customers’ branded versions of our products and services and the growth or decline in the subscriber base for such products and services; • our ability to maintain or increase gross margins; • variations in our sales channels or the mix of our product sales; • our ability to anticipate market needs and to identify, develop, complete, introduce, market and produce new products and technologies in a timely manner to address those needs; • the availability and pricing of competing products and technologies and the resulting effect on sales and pricing of our products; • acquisitions; • the effect of new and emerging technologies; • deferrals of orders by our customers in anticipation of new products, applications, product enhancements or operating systems; and • general economic and market conditions.
If we are not able to realize the value of the goodwill and net intangible assets, this could adversely affect our results of operations and financial condition, and also result in an impairment of those assets.
If we are not able to realize the value of net intangible assets, this could adversely affect our results of operations and financial condition and also result in an impairment of those assets.
Our efforts to protect our data, our customers’ and their end users' data and the other third party information and materials we receive, and to disable undesirable activities on our systems, may also be unsuccessful due to software bugs or other technical malfunctions, employee, contractor, or vendor error or malfeasance, including defects or vulnerabilities in our vendors’ information technology systems or offerings, breaches of security of our facilities or technical infrastructure, or other threats that may evolve in the future.
Our efforts to protect our data, our customers’ and their end users' data and the other third party information and materials we receive, and to disable undesirable activities on our systems, may also be unsuccessful due to software bugs or oth er technical malfunctions, employee, contractor, or vendor error or malfeasance, including defects or vulnerabilities in our vendors’ information technology systems or offerings, breaches of security of our facilities or technical infrastructure, or other threats that may evolve in the future.
Changes in the application stores’ policies and/or terms of service and other barriers to our distribution via mobile software application stores, or delays or interruptions in the ability of our customers to cause our software to be pre-loaded onto the devices that they distribute, may seriously harm our ability to maintain and/or grow the subscriber base for our products and services and could materially and adversely affect our financial condition and results of operations.
Changes in the application stores ’ policies and/or terms of service and other barriers to our distribution via mobile software application stores, or delays or interruptions in the ability of our customers to cause our software to be pre-loaded onto the devices that they distribute, may seriously harm our ability to maintain and/or grow the subscriber base for our products and services and could materially and adversely affect our financial condition and results of operations.
Even if we are successful in hiring and training sales teams, customers in other vertical markets may not need or sufficiently value our current products or new product introductions. Technology and customer needs change rapidly in our market, which could render our products obsolete and negatively affect our business, financial condition, and results of operations.
Even if we are successful in hiring and training sales teams, customers in other vertical markets may not need or sufficiently value our current products or new product introductions. 13 Table of Contents Technology and customer needs change rapidly in our market, which could render our products obsolete and negatively affect our business, financial condition, and results of operations.
Other General Risks Our customers’ launch of our products and services may be subject to the negotiation and completion of new agreements or amendments to existing agreements and/or lengthy design, qualification and go-to-market processes, which may result in longer sales and launch cycles than we expect, which may impact our financial results and cause our revenues and operating results to be difficult to predict.
Other General Risks Our customers ’ launch of our products and services may be subject to the negotiation and completion of new agreements or amendments to existing agreements and/or lengthy design, qualification and go-to-market processes, which may result in longer sales and launch cycles than we expect, which may impact our financial results and cause our revenues and operating results to be difficult to predict.
Our growth depends in part on our customers’ ability and willingness to timely launch and deliver our products and services, to promote our products and services, and to attract and retain new end user customers or achieve other goals outside of our control.
Our growth depends in part on our customers ’ ability and willingness to timely launch and deliver our products and services, to promote our products and services, and to attract and retain new end user customers or achieve other goals outside of our control.
We rely on our ability and/or customers’ ability to distribute our mobile software applications to their end users through third party mobile software application stores, and/or by causing our software to be pre-loaded on the mobile devices that they distribute, which in each case we do not control.
We rely on our ability and/or customers ’ ability to distribute our mobile software applications to their end users through third party mobile software application stores, and/or by causing our software to be pre-loaded on the mobile devices that they distribute, which in each case we do not control.
This unpredictability may cause our revenues and operating results to vary unexpectedly from quarter-to-quarter, making our future operational results less predictable. 16 Table of Contents Our acquisitions of companies or technologies may disrupt our business and divert management attention and cause our other operations to suffer.
This unpredictability may cause our revenues and operating results to vary unexpectedly from quarter-to-quarter, making our future operational results less predictable. Our acquisitions of companies or technologies may disrupt our business and divert management attention and cause our other operations to suffer.
The 14 Table of Contents costs of compliance with, and other burdens imposed by, these laws and regulations may become substantial and may limit the use and adoption of our offerings, require us to change our business practices, impede the performance and development of our solutions.
The costs of compliance with, and other burdens imposed by, these laws and regulations may become substantial and may limit the use and adoption of our offerings, require us to change our business practices, impede the performance and development of our solutions.
As indicated in the report provided from our independent registered public accounting firm, the Company's present financial situation raises substantial doubt about the Company's ability to continue as a going concern without additional 10 Table of Contents capital becoming available to the Company.
As indicated in the report provided from our independent registered public accounting firm, the Company's present financial situation raises substantial doubt about the Company's ability to continue as a going concern without additional capital becoming available to the Company.
In addition, we 15 Table of Contents sometimes include open-source software in our products. As a result of our use of open-source software in our products, we may license or be required to license or disclose code and/or innovations that turn out to be material to our business and may also be exposed to increased litigation risk.
As a result of our use of open-source software in our products, we may license or be required to license or disclose code and/or innovations that turn out to be material to our business and may also be exposed to increased litigation risk.
If adequate funds are not available, we may be required to curtail our operations or other business activities significantly or to obtain funds through arrangements with strategic partners or others that may require us to relinquish rights to certain technologies or potential markets.
We may not be able to obtain additional funds on favorable terms, or at all. If adequate funds are not available, we may be required to curtail our operations or other business activities significantly or to obtain funds through arrangements with strategic partners or others that may require us to relinquish rights to certain technologies or potential markets.
We sell our wireless products and solutions primarily to large wireless carriers, so there are a limited number of actual and potential customers for our products, resulting in significant customer concentration. For the year ended December 31, 2024, sales to our three largest customers comprised 58%, 20%, and 14% of our revenues.
We sell our wireless products and solutions primarily to large wireless carriers, so there are a limited number of actual and potential customers for our products, resulting in significant customer concentration. For the year ended December 31, 2025, sales to our three largest customers comprised 60%, 21%, and 18% of our revenues.
The timing of these additional expenses can significantly vary quarter to quarter and even from year to year. Our results of operations may be adversely affected if we fail to realize the full value of our goodwill and intangible assets. As of December 31, 2024, we had total goodwill and net intangible assets of $34.6 million.
The timing of these additional expenses can significantly vary quarter to quarter and even from year to year. Our results of operations may be adversely affected if we fail to realize the full value of our intangible assets. As of December 31, 2025, we had net intangible assets of $18.5 million.
In that event, our business, financial condition, and results of operations would be materially and adversely affected. Due to all of the foregoing factors, and the other risks discussed in this Report, you should not rely on quarter-to-quarter comparisons of our operating results as an indication of future performance. Item 1B. UNRESOLVED STAFF COMMENTS None.
In that event, our business, financial condition, and results of operations would be materially and adversely affected. Due to all of the foregoing factors, and the other risks discussed in this Report, you should not rely on quarter-to-quarter comparisons of our operating results as an indication of future performance. 19 Table of Contents
Changes in our products or to those 9 Table of Contents operating systems, devices, networks, standards, or third-party technology, or interference with those relationships may seriously harm our customers’ ability to retain or attract new users and may harm our revenue and growth.
Changes in our products or to those operating systems, devices, networks, standards, or third-party technology, or interference with those relationships may seriously harm our customers ’ ability to retain or attract new users and may harm our revenue and growth.
It is possible that third parties may copy or otherwise obtain our rights without our authorization. It is also possible that third parties may independently develop technologies similar to ours. It may be difficult for us to detect unauthorized use of our intellectual property and proprietary rights.
It is possible that third parties may copy or otherwise obtain our rights without our authorization. It is also possible that third parties may independently develop technologies similar to ours. It may be difficult for us to detect unauthorized use of our intellectual property and proprietary rights. In addition, we sometimes include open-source software in our products.
The amount of capital that we will need in the future will depend on many factors, including but not limited to: • the launch and market acceptance of our products; • the levels of promotion and advertising that will be required to launch our products and achieve and maintain a competitive position in the marketplace; • our business, product, capital expenditure, and research and development plans and product and technology roadmaps; • the levels of working capital that we maintain; • any acquisitions that we would choose to undertake; • capital improvements to new and existing facilities; • technological advances; • our competitors’ response to our products; and • our relationships with suppliers and customers.
The amount of capital that we will need in the future will depend on many factors, including but not limited to: • the launch and market acceptance of our products; • the levels of promotion and advertising that will be required to launch our products and achieve and maintain a competitive position in the marketplace; • our business, product, capital expenditure, and research and development plans and product and technology roadmaps; • the levels of working capital that we maintain; • any acquisitions that we would choose to undertake; • capital improvements to new and existing facilities; • technological advances; • our competitors’ response to our products; and • our relationships with suppliers and customers. 11 Table of Contents In addition, we may raise additional capital to accommodate planned growth, hiring, and infrastructure needs or to consummate acquisitions of other businesses, products, or technologies.
We may encounter challenges in the execution of these efforts, and these challenges could impact our financial results. Moreover, although we believe that these efforts have reduced operating costs and improved operating margins, we cannot guarantee that we will sustain the targeted benefits, or that the benefits will be adequate to meet our long-term profitability and operational expectations.
Moreover, although we believe that these efforts have reduced operating costs and improved operating margins, we cannot guarantee that we will sustain the targeted benefits, or that the benefits will be adequate to meet our long-term profitability and operational expectations.
We may be subject to claims of intellectual property infringement as the number of trademarks, patents, copyrights, and other intellectual property rights asserted by companies in our industry grows and the coverage of these patents and other rights and the conduct of our business, including the functionality of our products, increasingly overlap.
Any of these events could have an adverse effect on our business and financial results. 16 Table of Contents We may be subject to claims of intellectual property infringement as the number of trademarks, patents, copyrights, and other intellectual property rights asserted by companies in our industry grows and the coverage of these patents and other rights and the conduct of our business, including the functionality of our products, increasingly overlap.
Additional funds to allow us to meet our capital needs may not be available on terms acceptable to us or at all. It is likely that we may need or choose to obtain additional financing to fund our future activities.
Additional funds to allow us to meet our capital needs may not be available on terms acceptable to us or at all. Additional financing will likely be required to fund our future activities.
Also, the prices of OTC stocks are often more volatile than Exchange-listed stocks. Additionally, institutional investors are usually prohibited from investing in OTC stocks, and it might be more challenging to raise capital when needed.
Many OTC stocks trade less frequently and in smaller volumes than Exchange-listed stocks. Accordingly, our stock would be less liquid than it would be otherwise. Also, the prices of OTC stocks are often more volatile than Exchange-listed stocks. Additionally, institutional investors are usually prohibited from investing in OTC stocks, and it might be more challenging to raise capital when needed.
Exercise of outstanding warrants issued in connection with our capital raising efforts will dilute the ownership interest of our existing stockholders or may otherwise depress the price of our common stock. As of March 10, 2025, there were warrants outstanding to purchase up to 8,382,048 shares of our common stock at exercises prices ranging from $1.04 to $21.20.
Exercise of outstanding warrants issued in connection with our capital raising efforts will dilute the ownership interest of our existing stockholders or may otherwise depress the price of our common stock. As of February 28, 2026, there were warrants outstanding to purchase up to 18,348,471 shares of our common stock at exercises prices ranging from $0.67 to $21.20.
Interruptions or delays in service from data center hosting facilities could impair the delivery of our service and harm our business. We currently serve our customers from data center hosting facilities. Any damage to, or failure of, such facilities generally could result in interruptions in our service.
Interruptions or delays in service from data center hosting facilities or virtual cloud infrastructures could impair the delivery of our service and harm our business. We currently serve our customers from data center hosting facilities or virtual cloud infrastructures.
Burgeoning legal obligations may require expenditure of considerable resources to establish and maintain the necessary internal infrastructure to comply with monitoring obligations, requests from data subjects, and other requirements, which may limit the use and adoption of our offerings. Other state and federal legislative and regulatory bodies have enacted or may enact similar legislation regarding the handling of personal data.
Burgeoning legal obligations may require expenditure of considerable resources to establish and maintain the necessary internal infrastructure to comply with monitoring obligations, requests from data subjects, and other requirements, which may limit the use and adoption of our offerings.
If the Company or our third-party service providers are unable to obtain or renew critical licenses on reasonable terms, we may be forced to terminate or curtail our products and services which rely on such intellectual property, and our financial condition and operating results may be materially adversely affected.
If the Company or our third-party service providers are unable to obtain or renew critical licenses on reasonable terms, we may be forced to terminate or curtail our products and services which rely on such intellectual property, and our financial condition and operating results may be materially adversely affected. 18 Table of Contents Our quarterly revenues and operating results are difficult to predict and could fall below analyst or investor expectations, which could cause the price of our common stock to fall.
Foreign privacy and data protection laws and regulations can be more restrictive than those in the United States. For example, in the European Union, the GDPR includes operational and governance requirements for companies that collect or process personal data of residents of the European Union and provides for significant penalties for non-compliance.
For example, in the European Union, the GDPR includes operational and governance requirements for companies that collect or process personal data of residents of the European Union and provides for significant penalties for non-compliance.
Shifts in the dynamics of the vertical markets that we serve, such as new product introductions by our competitors, could materially harm our results of operations, financial condition, and prospects.
In order to sustain and grow our business, we must continue to sell our software products in this vertical market, and we must seek to expand into additional markets. Shifts in the dynamics of the vertical markets that we serve, such as new product introductions by our competitors, could materially harm our results of operations, financial condition, and prospects.
Our inability to attract and retain the highly trained technical personnel that are essential to our product development, sales, marketing, service, and support teams may limit the rate at which we can generate revenue, develop new products or product enhancements, and generally would have an adverse effect on our business, financial condition, and results of operations.
Our inability to attract and retain the highly trained technical personnel that are essential to our product development, sales, marketing, service, and support teams may limit the rate at which we can generate revenue, develop new products or product enhancements, and generally would have an adverse effect on our business, financial condition, and results of operations. 8 Table of Contents Security breaches, improper access to or disclosure of our data, our customers ’ data or their end users ’ data, other hacking attacks on our systems or the third-party systems that we use, or other cyber incidents and privacy breaches could harm our reputation and adversely affect our business.
The Company's actions to reduce operating costs as a result of the receipt of the notice of termination of one of our U.S. Tier 1 customer contracts caused the Company to incur additional charges related to severance and reorganization activities in 2023 and 2024, which included charges related to employee transition, severance payments, employee benefits, and stock-based compensation.
The Company's actions to reduce operating costs have caused the Company to incur additional charges related to severance and reorganization activities in 2025 and 2024, which included charges related to employee transition, severance payments, employee benefits, and stock-based compensation.
In addition, the existence of these warrants may encourage short selling by market participants because the exercise of the warrants could be used to satisfy short positions. 12 Table of Contents Risks Related to our Industry and Macroeconomic Conditions We derive a significant portion of our revenues from wireless carriers, and changes within this vertical market, or failure to penetrate new markets, could adversely impact our revenues and operating results.
Risks Related to our Industry and Macroeconomic Conditions We derive a significant portion of our revenues from wireless carriers, and changes within this vertical market, or failure to penetrate new markets, could adversely impact our revenues and operating results. We derive a significant portion of our revenue from wireless carriers.
We assess goodwill and definite lived assets for impairment annually, and we conduct an interim evaluation of definite lived and indefinite lived assets whenever events or changes in circumstances indicate that these assets may be impaired.
We assess definite lived assets for impairment annually, and we conduct an interim evaluation of definite lived and indefinite lived assets whenever events or changes in circumstances indicate that these assets may be impaired. Our ability to realize the value of net intangible assets will depend on the future cash flows of the businesses to which they relate.
Our future success also depends on our ability to continue to attract, retain, and motivate qualified personnel, particularly highly skilled engineers involved in the ongoing research and development required to develop and enhance our products. 8 Table of Contents Competition for these employees remains high and employee retention is a common problem in our industry.
The loss of the services of our key employees could materially and adversely affect our business, financial condition, and results of operations. Our future success also depends on our ability to continue to attract, retain, and motivate qualified personnel, particularly highly skilled engineers involved in the ongoing research and development required to develop and enhance our products.
Financial, Investment and Indebtedness Risks If we are unable to meet our obligations as they become due over the next twelve months, the Company may not be able to continue as a going concern.
Any such problems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospective customers and could negatively affect our results of operations. 10 Table of Contents Financial, Investment and Indebtedness Risks If we are unable to meet our obligations as they become due over the next twelve months, the Company may not be able to continue as a going concern.
OTC transactions involve risks in addition to those associated with transactions in securities traded on the securities exchanges, such as the Nasdaq Capital Market, or, together, Exchange-listed stocks. Many OTC stocks trade less frequently and in smaller volumes than Exchange-listed stocks. Accordingly, our stock would be less liquid than it would be otherwise.
In the event of a delisting from the Nasdaq Capital Market, our common stock would likely be traded in the over-the-counter inter-dealer quotation system, more commonly known as the OTC. OTC transactions involve risks in addition to those associated with transactions in securities traded on the securities exchanges, such as the Nasdaq Capital Market, or, together, Exchange-listed stocks.
Tier 1 customer contract, we announced we would accelerate our efforts designed to reduce operating costs to advance our ongoing commitment to profitable growth. As a result, we have reduced operating expenditures significantly since that date, and we may need to continue such efforts.
Beginning in 2023, we accelerated efforts designed to reduce operating costs to advance our ongoing commitment to profitable growth, resulting in significantly reduced operating expenditures since that date, and we may need to continue such efforts. We may encounter challenges in the execution of these efforts, and these challenges could impact our financial results.
We are required to meet specified requirements in order to maintain our listing on Nasdaq.
We are required to meet specified financial requirements in order to maintain our listing on Nasdaq. We could lose our listing on Nasdaq if the closing bid price of our common stock does not increase or if in the future, we fail to meet any of the other Nasdaq listing requirements.
During 2024 and 2023, we have been in a net loss position, partially driven by the loss of one of our U.S. Tier 1 customers in 2023. In February 2023, following receipt of notice of termination of this U.S.
The Company has a history of net losses and may incur substantial net losses in the future. We have been in a net loss position for all periods presented, in part due to the loss of one of our U.S. Tier 1 customers in 2023.
We could raise these funds by selling more stock to the public or to selected investors, or by entering into borrowing arrangements. We may not be able to obtain additional funds on favorable terms, or at all.
We could raise these funds by selling more stock to the public or to selected investors, or by entering into borrowing arrangements; provided that the terms of our outstanding warrants and Convertible Notes (as defined below) do not hinder our ability to access the capital markets (See “ Risks Related to Our Convertible Notes”) .
The loss of our Nasdaq listing would in all likelihood make our common stock significantly less liquid and adversely affect its value. In the event of a delisting from the Nasdaq Capital Market, our common stock would likely be traded in the over-the-counter inter-dealer quotation system, more commonly known as the OTC.
The loss of our Nasdaq listing would in all likelihood make our common stock significantly less liquid and adversely affect its value. As initially disclosed on our Current Report on Form 8-K filed with the SEC, on June 23, 2025, Smith Micro Software, Inc.
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The loss of the services of our key employees could materially and adversely affect our business, financial condition, and results of operations.
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Competition for these employees remains high and employee retention is a common problem in our industry.
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Security breaches, improper access to or disclosure of our data, our customers’ data or their end users’ data, other hacking attacks on our systems or the third-party systems that we use, or other cyber incidents and privacy breaches could harm our reputation and adversely affect our business.
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Any damage to, or failure of, or degradation of performance from such facilities or virtual cloud infrastructures generally could result in interruptions in our service. Our platform depends, in part, on the virtual cloud infrastructure hosted by AWS.
Removed
Interruptions in our service may reduce our revenue, cause us to issue credits or pay penalties, cause customers to terminate their on-demand services, and adversely affect our renewal rates and our ability to attract new customers.
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Although we have disaster recovery plans that utilize multiple AWS locations, any incident affecting their infrastructure that may be caused by fire, flood, severe storm, earthquake or other natural disasters, power loss, telecommunications failures, cyber-attacks, terrorist or other attacks, and other similar events beyond our control, could adversely affect our cloud-native platform.
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Any such problems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospective customers and could negatively affect our results of operations.
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Additionally, AWS may experience threats or attacks from computer malware, ransomware, viruses, social engineering (including phishing attacks), denial of service or other attacks, employee theft or misuse and general hacking have become more prevalent, particularly against cloud-native services and vendors of security solutions.
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In addition, we may raise additional capital to accommodate planned growth, hiring, and infrastructure needs or to consummate acquisitions of other businesses, products, or technologies. 11 Table of Contents The Company has a history of net losses and may incur substantial net losses in the future.
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Any of these security incidents could result in unauthorized access to, damage to, disablement or encryption of, use or misuse of, disclosure of, modification of, loss or destruction of, or other unauthorized processing of our data or Consumers’ data or disrupt our ability to provide our platform or service.
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Our ability to realize the value of goodwill and net intangible assets will depend on the future cash flows of the businesses to which they relate.
Added
A prolonged AWS service disruption affecting our cloud-native platform for any of the foregoing reasons could interrupt or degrade the performance of our platform and adversely impact our ability to serve Consumers and could damage our reputation with current and potential customers, expose us to liability, result in substantial costs for remediation, may reduce our revenue, cause us to issue credits or pay penalties, cause us to lose customers, or otherwise harm our b usiness, financial condition, or results of operations.
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We derive a significant portion of our revenue from wireless carriers. In order to sustain and grow our business, we must continue to sell our software products in this vertical market, and we must seek to expand into additional markets.
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We may also incur significant costs for using alternative hosting sources or taking other actions in preparation for, or in reaction to, events that damage the AWS services we use.
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Any of these events could have an adverse effect on our business and financial results.
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In addition, the existence of these warrants may encourage short selling by market participants because the exercise of the warrants could be used to satisfy short positions. 12 Table of Contents Risks Related to Our Convertible Notes The terms of our Convertible Notes, and our debt repayment obligations thereunder, may restrict our ability to obtain additional financing, and adversely affect our financial condition and cash flows from operations in the future.
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We could lose our listing on Nasdaq if in the future we become non-compliant with any of the Nasdaq continued listing requirements and, if applicable, we would not remedy such failure within the time allotted by Nasdaq, including for example if the closing bid price of our common stock were to fall and remain below $1.00 per share for more than 30 consecutive business days and we were not able to remedy that failure in the allotted time, or if in the future we would fail to comply with any of the other Nasdaq listing requirements.
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We are obligated to issue senior secured notes convertible into our common stock pursuant to that certain Securities Purchase Agreement dated as of March 4, 2026 (the “Convertible Notes”).
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Our quarterly revenues and operating results are difficult to predict and could fall below analyst or investor expectations, which could cause the price of our common stock to fall.
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Our indebtedness under the Convertible Notes, and certain restrictions included within the terms of the Convertible Notes, may restrict, and otherwise impair our ability to obtain additional financing in the future for general corporate purposes, including working capital, capital expenditures, potential acquisitions and strategic transactions.
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Further, a portion of our cash flows from operations may have to be dedicated to repaying the principal and interest of the Convertible Notes while the Convertible Notes are outstanding.
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Our ability to meet our debt obligations will depend on our future performance, which will be affected by financial, business, economic, regulatory and other factors, many of which are outside of our control. Our future operations may not generate sufficient cash to enable us to repay our debt, including the Convertible Notes.
Added
If we fail to make a payment on our debt, we could be in default on such debt. Conversion of the Convertible Notes and exercise of the warrants issued in connection with the Convertible Notes will dilute the ownership interest of our existing stockholders or may otherwise depress the price of our common stock.
Added
The conversion of some or all of the Convertible Notes or exercise of some or all of the warrants issued along with the Convertible Notes will dilute the ownership interests of existing stockholders.
Added
Any sales in the public market of our common stock issuable upon such conversion of the Convertible Notes or exercise of the warrants could adversely affect prevailing market prices of our common stock.
Added
In addition, the existence of the Convertible Notes may encourage short selling by market participants because the conversion of the Convertible Notes or exercise of the warrants could be used to satisfy short positions, or anticipated conversion of the Convertible Notes into, or exercise of warrants for, shares of our common stock could depress the price of our common stock.
Added
Our obligations to the holders of our Convertible Notes are secured by a security interest certain of our assets, including our accounts receivable, and if we default on those obligations, the note holders could foreclose on those assets.
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Our obligations under the Convertible Notes and the transaction documents relating to those notes are secured by a security interest in certain of our assets.
Added
As a result, if we default under our obligations under the Convertible Notes or the transaction documents, the holders of the Convertible Notes, acting through their appointed agent, could foreclose on their security interests and liquidate some or all of these assets, which would harm our business, financial condition and results of operations and could require us to curtail or cease operations.
Added
The holders of our Convertible Notes have certain additional rights upon an event of default under the Convertible Notes which could harm our business, financial condition and results of operations and could require us to curtail or cease our operations. Under our Convertible Notes, the holders have various rights upon an event of default.
Added
Such rights include (i) an increase in the interest rate; and (ii) the holders having the right to demand redemption of all or a portion of the Convertible Notes.
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At any time after certain notice requirements for an event of default are triggered, a holder of the Convertible Notes may require us to redeem all or any portion by delivering written notice.
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Each portion of the Convertible Notes subject to redemption would be redeemed by us in cash by wire transfer of immediately available funds at a price equal to the outstanding principal and interest under the Convertible Note.
Added
We may not have sufficient funds to settle the redemption price and, as described above, this could trigger rights under the security interest granted to the holders and result in the foreclosure of their security interests and liquidation of some of our assets.
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Other state and federal legislative and regulatory bodies have enacted or may enact similar legislation regarding the handling of personal data. 15 Table of Contents Foreign privacy and data protection laws and regulations can be more restrictive than those in the United States.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES Our corporate headquarters is located in Pittsburgh, Pennsylvania, where we currently lease approximately 35,621 square feet of space under a lease that expires on April 30, 2026. In January 2024, we executed a renewal on a lease where we occupy approximately 8,513 square feet of space in Aliso Viejo, California that now expires on February 29, 2028.
Biggest changeItem 2. PROPERTIES Our corporate headquarters is located in Pittsburgh, Pennsylvania, where we currently lease approximately 35,621 square feet of space under a lease that expires on April 30, 2026. In February 2026, we executed a renewal on the lease whereby beginning May 1, 2026 we will lease approximately 9,571 square feet through April 30, 2031.
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Each of the above properties is used by our sole reportable operating segment: Wireless.
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We occupy approximately 8,513 square feet of space in Aliso Viejo, California in a lease that expires on February 29, 2028.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile management does not currently believe that the ultimate disposition of these matters will have a material adverse impact on the Company’s consolidated results of operations, cash flows, or financial position, litigation is inherently unpredictable, and depending on the nature and timing of these proceedings, an unfavorable resolution could materially affect the Company’s future consolidated results of operations, cash flows or financial position in a particular period. 19 Table of Contents Item 4.
Biggest changeWhile management does not currently believe that the ultimate disposition of these matters will have a material adverse impact on the Company’s consolidated results of operations, cash flows, or financial position, litigation is inherently unpredictable, and depending on the nature and timing of these proceedings, an unfavorable resolution could materially affect the Company’s future consolidated results of operations, cash flows or financial position in a particular period.
MINE SAFETY DISCLOSURES Not Applicable. 20 Table of Contents PART II
Item 4. MINE SAFETY DISCLOSURES Not Applicable. 21 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Company The table set forth below shows all purchases of securities by us during the fourth quarter of fiscal year 2024: ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares (or Units) Purchased (1) (a) Average Price Paid per Share (or Unit) (b) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (c) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (d) October 1 - 31, 2024 17,514 $ 1.02 0.00 0.00 November 1 - 30, 2024 54,315 0.90 0.00 0.00 December 1 - 31, 2024 2,659 0.77 0.00 0.00 Total 74,488 $ 0.92 (a) Includes the acquisition of stock by the Company as payment of withholding taxes in connection with the vesting of restricted stock awards in an aggregate amount of 74,488 shares during the periods set forth in the table.
Biggest changePurchases of Equity Securities by the Company The table set forth below shows all purchases of securities by us during the fourth quarter of fiscal year 2025: ISSUER PURCHASES OF EQUITY SECURITIES Total Number of Shares (or Units) Purchased (1) Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs Period (a) (b) (c) (d) October 1 - 31, 2025 — $ — 0.00 0.00 November 1 - 30, 2025 224,557 0.64 0.00 0.00 December 1 - 31, 2025 8,037 0.59 0.00 0.00 Total 232,594 $ 0.64 ​ ​ (1) Shares of the Company's Common Stock repurchased by the Company as payment of withholding taxes in connection with the vesting of restricted stock awards during the applicable period.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the Nasdaq Capital Market under the symbol “SMSI.” For information regarding Securities Authorized for Issuance under Equity Compensation Plans, please refer to Item 12 in Part III of this Annual Report on Form 10-K.
Item 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the Nasdaq Capital Market under the symbol “SMSI.” For information regarding Securities Authorized for Issuance under Equity Compensation Plans, please refer to Item 12 in Part III of this Annual Report on Form 10-K.
Holders As of March 10, 2025, there were approximately 70 holders of record of our common stock based on information provided by our transfer agent. Dividends We have never declared or paid any cash dividends on our common stock. We do not expect to pay any cash dividends on our common stock in the foreseeable future.
Holders As of February 26, 2026, there were approximately 87 holders of record of our common stock based on information provided by our transfer agent. Dividends We have never declared or paid any cash dividends on our common stock. We do not expect to pay any cash dividends on our common stock in the foreseeable future.
All of the shares were canceled when they were acquired. Item 6. Reserved. 21 Table of Contents
All shares were cancelled when they were acquired by the Company.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeRefer to section titled "Liquidity and Capital Resources" for discussion of significant material changes in cash and Note 7 of our Notes to the Consolidated Financial Statements for discussion regarding the changes related to the notes payable, derivative liabilities, and warrant liabilities. 22 Table of Contents Results of Operations The following table sets forth certain consolidated statement of operations data as a percentage of total revenues for the periods indicated: For the Year Ended December 31, 2024 2023 Revenues 100.0 % 100.0 % Cost of revenues 29.8 25.8 Gross profit 70.2 74.2 Operating expenses: Selling and marketing 43.2 27.1 Research and development 68.5 42.0 General and administrative 51.5 31.3 Depreciation and amortization 30.6 18.0 Goodwill impairment 116.7 — Total operating expenses 310.5 118.3 Operating loss (240.3) (44.2) Change in fair value of warrant and derivative liabilities 1.8 10.3 Loss on derecognition of debt — (9.8) Interest income (expense), net 0.5 (15.5) Other income (expense), net 1.0 (0.1) Loss before provision for income tax (benefit) provision (237.0) (59.3) (Benefit) provision for income tax expense (0.1) 0.4 Net loss (236.9) % (59.7) % Revenues and Expense Components The following is a description of the primary components of our revenues and expenses: Revenues.
Biggest changeThe following table sets forth certain consolidated statement of operations data as a percentage of total revenues for the periods indicated: For the Year Ended December 31, 2025 2024 Revenues 100.0 % 100.0 % Cost of revenues 25.9 29.8 Gross profit 74.1 % 70.2 % Operating expenses: Selling and marketing 34.4 43.2 Research and development 61.7 68.5 General and administrative 57.6 51.5 Depreciation and amortization 31.1 30.6 Gain on sale of ViewSpot, net (7.4) - Goodwill impairment 63.7 116.7 Total operating expenses 241.1 % 310.5 % Other (expense) income: Operating loss (167.1) (240.3 ) Change in fair value of warrant liabilities 1.0 1.8 Interest (expense) income, net (2.3) 0.5 Other (expense) income, net (0.9) 1.0 Loss before benefit for income tax (169.3 )% (237.0 )% Income tax benefit (0.4) (0.1) Net loss (168.9 )% (236.9 )% Deemed dividend (4.4 )% - Net loss attributable to common stockholders (173.3 )% (236.9 )% Revenues and Expense Components The following is a description of the primary components of our revenues and expenses: Revenues.
Financing activities Net cash provided by financing activities of $9.8 million for the year ended December 31, 2024 was attributable to the net cash proceeds of $9.8 million from the offerings conducted in May 2024 and October 2024.
Net cash provided by financing activities of $9.8 million for the year ended December 31, 2024 was attributable to the net cash proceeds of $9.8 million from the offerings conducted in May 2024 and October 2024.
Revenues are net of allowances. Our operations are organized into one business segment, Wireless, which includes all of our existing core products, including the Family Safety (including SafePath), CommSuite, and ViewSpot portfolio of products. Cost of revenues. Cost of revenues consists of direct product and hosting, maintenance, data center, royalties, and technical support expenses including personnel costs. Selling and marketing.
Revenues are net of allowances. Our operations are organized into one business segment, Wireless, which includes all of our existing core products, including the Family Safety (including SafePath) and CommSuite portfolio of products. Cost of revenues. Cost of revenues consists of direct product and hosting, maintenance, data center, royalties, and technical support expenses including personnel costs. Selling and marketing.
The availability of sufficient funds will depend to an extent on the timing of subscriber growth and the related cash generation thereof, and/or the ability to obtain the necessary capital to meet our obligations and fund our working capital requirements to maintain normal business operations.
The availability of sufficient funds will depend to an extent on the existence and timing of subscriber growth and the related cash generation thereof, and/or the ability to obtain the necessary capital to meet our obligations and fund our working capital requirements to maintain normal business operations.
For warrant liabilities and derivatives, we may utilize fair value measurements which are categorized within Level 3 of the fair value hierarchy, and subsequent changes in fair value for designated items are required to be reported in earnings in the current period.
For warrant liabilities, we may utilize fair value measurements which are categorized within Level 3 of the fair value hierarchy, and subsequent changes in fair value for designated items are required to be reported in earnings in the current period.
However, to meet future cash needs, the Company may determine to take additional actions, as noted in our Risk Factor " If we are unable to meet our obligations as they become due over the next twelve months, the Company may not be able to continue as a going concern." There can be no assurance that any such potential actions will be available or will be available on satisfactory terms.
To meet future cash needs, the Company may determine to take additional actions, as noted in the Risk Factor appearing in our 2025 Risk Factor, "If we are unable to meet our obligations as they become due over the next twelve months, the Company may not be able to continue as a going concern." There can be no assurance that any such potential actions will be available or will be available on satisfactory terms.
Income tax (benefit) expense is primarily related to the provision for federal, state, and foreign taxes imposed upon our results of operations. Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Revenues .
Provision (benefit) for income tax expense. Income tax (benefit) expense is primarily related to the provision for federal, state, and foreign taxes imposed upon our results of operations. Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Revenues .
For goodwill and other intangibles impairment analysis, we may utilize fair value measurements which are categorized within Level 3 of the fair value hierarchy. 27 Table of Contents Impairment or Disposal of Long-Lived Assets Long-lived assets to be held are reviewed for events or changes in circumstances which indicate that their carrying value may not be recoverable.
For goodwill and other intangibles impairment analysis, we may utilize fair value measurements which are categorized within Level 3 of the fair value hierarchy. Impairment or Disposal of Long-Lived Assets Long-lived assets to be held are reviewed for events or changes in circumstances which indicate that their carrying value may not be recoverable.
Depreciation is the expensing of a fixed asset as it is used to reflect its anticipated deterioration. Amortization of intangible assets consists of the amortization expense based on the pattern of economic benefit generated from the use of the related assets. Goodwill impairment.
Depreciation is the expensing of a fixed asset as it is used to reflect its anticipated deterioration. Amortization of intangible assets consists of the amortization expense based on the pattern of economic benefit generated from the use of the related assets. 24 Table of Contents Goodwill impairment.
We recognize these revenues upon delivery of the configured promotional content to the cloud platform or upon certification of the new device.
We recognized these revenues upon delivery of the configured promotional content to the cloud platform or upon certification of the new device.
Investing activities Net cash provided by investing activities of $0.2 million for the year ended December 31, 2024 was primarily attributable to the net proceeds from licensing several of our patents. Net cash used in investing activities was $0.1 million for the year ended December 31, 2023.
Net cash used in investing activities was $0.2 million for the year ended December 31, 2024 was primarily attributable to the net proceeds from licensing several of our patents.
Depreciation expense was $0.4 million and $0.6 million for the years ended December 31, 2024 and 2023, respectively. Amortization expense was $5.9 million and $6.8 million for the years ended December 31, 2024 and 2023, respectively. The total decrease in depreciation expense of approximately $0.2 million was primarily due to certain fixed assets that have now been fully depreciated.
Depreciation expense was $0.3 million and $0.4 million for the years ended December 31, 2025 and 2024, respectively. Amortization expense was $5.1 million and $5.9 million for the years ended December 31, 2025 and 2024, respectively. The total decrease in depreciation expense of approximately $0.1 million was primarily due to certain fixed assets that have now been fully depreciated.
The primary uses of operating cash were a net loss of $48.7 million less non-cash expenses totaling $33.9 million, including a goodwill impairment charge of $24.0 million, depreciation and amortization of $6.3 million and stock compensation expense of $4.5 25 Table of Contents million, coupled with a decrease in accounts payable and accrued liabilities of $1.9 million, partially offset by a decrease in accounts receivable of $2.2 million.
The primary uses of operating cash were a net loss of $29.3 million less non-cash expenses totaling $20.1 million, including a goodwill impairment charge of $11.1 million, depreciation and amortization of $5.4 million and stock compensation expense of $3.6 million, coupled with a decrease in accounts payable and accrued liabilities of $0.7 million, partially offset by a decrease in accounts receivable of $3.9 million.
This decrease of $2.2 million was primarily due to decreases in personnel related costs of $1.7 million coupled with a period-over-period decline in marketing costs of $0.6 million and a decrease in travel costs of $0.1 million, partially offset by an increase in stock-based compensation of approximately $0.3 million. Research and development .
This decrease of $2.9 million was primarily due to decreases in personnel related costs of $2.6 million coupled with a period-over-period decline in marketing costs of $0.1 million and a decrease in stock-based compensation of approximately $0.3 million. Research and development .
Change in fair value of warrant and derivative liabilities. The change in fair value of warrant and derivative liabilities of $0.4 million and $4.2 million f or the years ended December 31, 2024 and 2023, respectively, resulted from valuation related impacts to warrant and derivative liabilities including changes in stock price, risk-free interest rate, expected term, and expected volatility.
The change in fair value of warrant liabilities of $0.2 million and $0.4 million for the years ended December 31, 2025 and 2024, respectively, resulted from valuation related impacts to warrant liabilities including changes in stock price, risk-free interest rate, expected term, and expected volatility. Interest (expense) income, net.
Stock-Based Compensation We account for all stock-based payment awards made to employees and directors based on their fair values and recognizes such awards as compensation expense over the vesting period using the straight-line method over the requisite service period for each award as required by FASB ASC Topic No. 718, Compensation-Stock Compensation . 28 Table of Contents Item 8.
We divested our ViewSpot product line on June 3, 2025. 30 Table of Contents Stock-Based Compensation We account for all stock-based payment awards made to employees and directors based on their fair values and recognizes such awards as compensation expense over the vesting period using the straight-line method over the requisite service period for each award as required by FASB ASC Topic No. 718, Compensation-Stock Compensation .
This decrease of $2.2 million was primarily related to declines in personnel-related costs of approximately $1.0 million associated with the workforce reduction efforts undertaken, a decrease in professional fees of approximately $0.2 million, a reduction in occupancy costs of approximately $0.4 million, and a decline in stock-based compensation of approximately $0.6 million. Depreciation and amortization .
This decrease of $0.6 million was primarily related to a decrease in professional fees of approximately $0.4 million, a decline in stock-based compensation of approximately $0.3 million, declines in personnel-related costs of approximately $0.1 million associated with the workforce reduction efforts undertaken, and was partially offset by bad debt write-offs of $0.2 million. Depreciation and amortization .
Amortization expense is recognized based on the pattern of economic benefit expected to be generated from the use of the intangible asset, and as such it decreased by approximately $0.9 million. Goodwill impairment.
Amortization expense is recognized based on the pattern of economic benefit expected to be generated from the use of the intangible asset, and as such it decreased by approximately $0.8 million. Gain on Sale of ViewSpot, net .
Research and development expenses were $14.1 million and $17.1 million for the years ended December 31, 2024 and 2023 , respectively.
Research and development expenses were $10.7 million and $14.1 million for the years ended December 31, 2025 and 2024, respectively.
General and administrative expenses were $10.6 million and $12.8 million for the years ended December 31, 2024 and 2023, respectively.
General and administrative expenses were $10.0 million and $10.6 million for the years ended December 31, 2025 and 2024, respectively.
Critical Accounting Policies and Estimates Our discussion and analysis of results of operations, financial condition, and liquidity are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Off-Balance Sheet Arrangements As of December 31, 2025, we did not have any off-balance sheet arrangements. Critical Accounting Policies and Estimates Our discussion and analysis of results of operations, financial condition, and liquidity are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Subsequent to the end of the measurement period or our final determination of the value of the tax allowance or contingency, whichever comes first, changes to these uncertain tax positions and tax-related valuation allowances will affect the provision for income taxes in the consolidated statement of operations and could have a material impact on results of our operations and financial position.
Subsequent to the end of the measurement period or our final determination of the value of the tax allowance or contingency, whichever comes first, changes to these uncertain tax positions and tax-related valuation allowances will affect the provision for income taxes in the consolidated statement of operations and could have a material impact on results of our operations and financial position. 28 Table of Contents Fair Value of Financial Instruments We measure and disclose fair value measurements as required by FASB ASC topics.
When the customer pays upfront, we record the payments as contract liabilities and recognize revenue ratably over the contract period as this is our stand ready performance obligation that is satisfied ratably over the maintenance and technology services period. We have received upfront payments from customers from services to be provided under our ViewSpot contracts.
When the customer pays upfront, we record the payments as contract liabilities and recognize revenue ratably over the contract period as this is our stand ready performance obligation that is satisfied ratably over the maintenance and technology services period.
Goodwill impairment represents the charge recorded in the amount of the carrying value of the Company's single reporting unit exceeding its fair value. Change in fair value of warrant and derivative liabilities. Change in fair value of warrant and derivative liabilities results from valuation related impacts to the warrant and derivative liabilities. Loss on derecognition of debt.
Goodwill impairment represents the charge recorded in the amount of the carrying value of the Company's single reporting unit exceeding its fair value. Change in fair value of warrant liabilities. Change in fair value of warrant liabilities results from valuation related impacts to the warrant liabilities. Interest (expense) income, net.
The advance receipts were deferred and subsequently recognized ratably over the contract period. We also provide consulting services to configure new devices or ad hoc targeted promotional content for our customers upon request. These requests are driven by our customers’ marketing initiatives and tend to be short term “bursts” of activity.
We also provided consulting services to configure new devices or ad hoc targeted promotional content for our customers utilizing the ViewSpot platform upon request from our customers. These requests were driven by our customers’ marketing initiatives and tend to be short term “bursts” of activity.
Fair Value of Financial Instruments We measure and disclose fair value measurements as required by FASB ASC topics. Fair value is an exit price, representing the amount that would be received upon the sale of an asset or the amount that would be paid to transfer a liability in an orderly transaction between market participants.
Fair value is an exit price, representing the amount that would be received upon the sale of an asset or the amount that would be paid to transfer a liability in an orderly transaction between market participants.
Cost of revenues were $6.1 million and $10.6 million for the years ended December 31, 2024 and 2023, respectively. This decrease of approximately $4.4 million was primarily due to cost reduction efforts in 2024 and the year-over-year decline in revenue. Gross profit .
This decrease of approximately $1.6 million was primarily due to cost reduction efforts in 2024 and 2025 and the year-over-year decline in revenue. Gross profit . Gross profit was $12.9 million, or 74.1% of revenues, for the year ended December 31, 2025, compared to $14.4 million, or 70.2% of revenues, for the year ended December 31, 2024.
Revenues were $20.6 million and $40.9 million for the years ended December 31, 2024 and 2023, respectively, representing a decrease of $20.3 million, or 50%. This decrease was driven by declines in Family Safety and ViewSpot revenues of approximately $18.1 million and $2.3 million, respectively.
Revenues were $17.4 million and $20.6 million for the years ended December 31, 2025 and 2024, respectively, representing a decrease of $3.2 million, or 16%. This decrease was driven by declines in Family Safety and ViewSpot revenues of approximately $2.3 million and $1.0 million, respectively, partially offset by an increase in CommSuite revenues of $0.1 million.
As a result of the decrease in revenue, gross profit declined to $14.4 million in 2024, a decrease of $15.9 million compared to the prior year.
As a result of the decrease in revenue, gross profit declined to $12.9 million in 2025, a decrease of $1.6 million compared to the prior year.
This decrease of approximately $3.1 million was primarily due to the decline in personnel-related costs of approximately $2.9 million associated with the workforce reduction efforts coupled with reductions in contractor costs of $0.2 million due to the substantial completion of SafePath migration efforts during 2023. General and administrative .
This decrease of approximately $3.4 million was primarily due to the decline in personnel-related costs of approximately $3.0 million associated with the workforce reduction efforts coupled with reductions in supply costs of $0.1 million and a decrease in stock-based compensation of approximately $0.3 million. General and administrative .
Cash Flows Changes in cash and cash equivalents are as follows: For the Year Ended December 31, (in thousands) 2024 2023 Net cash used in operating activities (14,295) (6,973) Net cash provided by investing activities 178 132 Net cash provided by (used in) financing activities 9,800 (60) Net decrease in cash and cash equivalents (4,317) (6,901) Operating activities Net cash used in operating activities was $14.3 million for the year ended December 31, 2024.
Cash Flows Changes in cash and cash equivalents are as follows: ​ ​ For the Year Ended December 31, ​ (in thousands) ​ 2025 ​ ​ 2024 ​ Net cash used in operating activities ​ $ (7,193 ) ​ $ (14,295 ) Net cash provided by investing activities ​ ​ 1,199 ​ ​ ​ 178 ​ Net cash provided by financing activities ​ ​ 4,680 ​ ​ ​ 9,800 ​ Net decrease in cash and cash equivalents ​ $ (1,314 ) ​ $ (4,317 ) 26 Table of Contents Operating activities Net cash used in operating activities was $7.2 million for the year ended December 31, 2025.
We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may materially differ from these estimates under different assumptions or conditions.
We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may materially differ from these estimates under different assumptions or conditions. On an on-going basis, we review our estimates to ensure that they appropriately reflect changes in our business or new information as it becomes available.
Internationally, we lease approximately 12,728 square feet in Belgrade, Serbia under a lease that expires July 31, 2026, approximately 1,500 square feet in Stockholm, Sweden under a lease that expires September 30, 2026, and approximately 2,659 square feet in Braga, Portugal under a lease that expires May 31, 2027.
Internationally, we lease approximately 12,728 square feet in Belgrade, Serbia under a lease that expires July 31, 2026, approximately 1,500 square feet in Stockholm, Sweden under a lease that expires September 30, 2026, and approximately 2,659 square feet in Braga, Portugal under a lease that expires May 31, 2027. 27 Table of Contents Recent Accounting Pronouncements See Note 1 of our Notes to Consolidated Financial Statements for information regarding recent accounting pronouncements.
We continue to innovate and evolve our business to respond to industry trends and maximize opportunities in growing and evolving markets, such as digital lifestyle services and online safety, “Big Data” analytics, automotive telematics, and the consumer IoT marketplace.
We continue to innovate and evolve our business to respond to industry trends and maximize opportunities in growing and evolving markets, such as digital lifestyle services and online safety, the consumer IoT marketplace, and by leveraging advanced technologies like artificial intelligence to enhance the features and capabilities of our solutions.
They are tested for recoverability using undiscounted cash flows to determine whether or not impairment to such value has occurred as per ASC Topic No. 360, Property, Plant, and Equipment. Goodwill and Intangible Assets Goodwill represents purchase consideration from a business combination that exceeds the value assigned to the net assets of the acquired businesses. As per Topic No.
They are tested for recoverability using undiscounted cash flows to determine whether or not impairment to such value has occurred as per ASC Topic No. 360, Property, Plant, and Equipment.
Interest expense is primarily related to interest associated with our convertible notes and financing arrangements and the amortization of debt issuance costs and discount. Other income (expense), net. Other income (expense), net is primarily related to fixed asset disposals and other non-operating gains or losses. (Benefit) provision for income tax expense.
Interest expense is primarily related to interest associated financing arrangements, amortization of debt issuance costs and discount, and interest incurred on short-term obligations. Interest income is primarily related to interest earned on cash equivalents. Other (expense) income, net. Other income (expense), net is primarily related to fixed asset disposals and other non-operating gains or losses.
Real Property Leases Our corporate headquarters is located in Pittsburgh, Pennsylvania, where we currently lease approximately 35,621 square feet of space under a lease that expires on April 30, 2026. In January 2024, we executed a renewal on a lease where we occupy approximately 8,513 square feet of space in Aliso Viejo, California that now expires on February 29, 2028.
Real Property Leases Our corporate headquarters is located in Pittsburgh, Pennsylvania, where we currently lease approximately 35,621 square feet of space under a lease that expires on April 30, 2026. In February 2026, we executed a renewal on the lease whereby beginning May 1, 2026 we will lease approximately 9,571 square feet through April 30, 2031.
Introduction and Overview Smith Micro provides software solutions that simplify and enhance the mobile experience to some of the leading wireless service providers around the globe. From enabling the Digital Family Lifestyle™ to providing powerful voice messaging capabilities, we strive to enrich today’s connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer IoT devices.
From enabling the Digital Family Lifestyle™ to providing powerful voice messaging capabilities, we strive to enrich today’s connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer Internet of Things ("IoT") devices.
Going Concern In connection with preparing our consolidated financial statements, management evaluates whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year from the date that the financial statements are issued.
In connection with preparing consolidated financial statements for the year ended December 31, 2025, certain conditions in the Company's evaluation, considered in the aggregate, have raised substantial doubt about the Company's ability to continue as a going concern within one year from the date that the financial statements are issued, which has not been alleviated.
While operating expenses increased in 2024 by approximately $15.5 million, the increase was primarily due to a non-cash goodwill impairment charge of $24.0 million. We realized year-over-year reductions in Research and Development, Sales and Marketing and General and Administrative expenses of $3.1 million, $2.2 million and $2.2 million, respectively, as a result of the cost reduction efforts undertaken.
We realized year-over-year reductions in Research and Development, Sales and Marketing and General and Administrative expenses of $3.4 million, $2.9 million and $0.6 million, respectively, as a result of the cost reduction efforts undertaken. These decreases resulted in a 20% reduction in operating expenses in 2025, excluding goodwill impairment, the ViewSpot sale, and depreciation and amortization, as compared to 2024.
Gross profit was $14.4 million, or 70.2% of revenues, for the year ended December 31, 2024 , compared to $30.3 million, or 74.2% of revenues, for the year ended December 31, 2023 . The decrease of $15.9 million in gross profit was a result of the year-over-year decline in revenue volume. Selling and marketing .
The decrease of $1.6 million in gross profit was a result of the year-over-year decline in revenue volume. Selling and marketing . Selling and marketing expenses were $6.0 million and $8.9 million for the years ended December 31, 2025 and 2024, respectively.
This decline in revenues was primarily as a result of the losses of a Family Safety contract with a Tier 1 carrier and two ViewSpot contracts, coupled with the migration of legacy Sprint customers onto the T-Mobile network, which has impacted our revenues associated with legacy Sprint subscribers for Family Safety. Cost of revenues .
This decline in Family Safety revenues was primarily due to the migration of legacy Sprint customers onto the T-Mobile network, which has impacted our revenues associated with legacy Sprint subscribers for Family Safety, combined with a one-time event with one of our existing deployments that resulted in reduced revenue.
Net cash used in operating activities was $7.0 million for the year ended December 31, 2023. The primary uses of operating cash were a net loss of $24.4 million less non-cash expenses totaling $17.8 million, and a decrease in accounts payable and accrued liabilities of $2.8 million, partially offset by a decrease in accounts receivable of $2.6 million.
Net cash used in operating activities was $14.3 million for the year ended December 31, 2024. The primary uses of operating cash were a net loss of $48.7 million less non-cash expenses totaling $34.1 million, including a goodwill impairment charge of $24.0 million, depreciation and amortization of $6.3 million and stock compensation expense of $4.5 million.
This adverse impact on liquidity does not trigger a violation of any covenants in our material agreements, particularly as all of our outstanding debt was retired as of December 31, 2023.
This adverse impact on liquidity does not trigger a violation of any covenants in our material agreements, particularly as the September 11, 2025 and September 29, 2025 Notes Purchase Agreements do not contain any material financial covenants.
Net cash used by financing activities of $0.1 million for the year ended December 31, 2023 was primarily attributable to the timing of borrowings and repayments from short-term insurance premium financing arrangements.
Financing activities Net cash provided by financing activities of $4.7 million for the year ended December 31, 2025 was attributable to the net cash proceeds to the Company of (i) $1.0 million from the July 2025 registered direct and private placement offering, (ii) $1.2 million in September 2025 from the issuance of notes and warrants, and (iii) net proceeds of $2.4 million from the November 2025 registered direct and private placement transactions, and the timing of borrowings of $0.9 million less repayments of $0.9 million from short-term insurance premium financing arrangements.
Because of our cumulative loss position, the current provision for income tax expense consists of state income taxes, foreign tax withholdings, and foreign income taxes. After consideration of the Company’s cumulative loss position as of December 31, 2024, the Company retained a full valuation allowance related to its U.S.-based deferred tax assets of $70.2 million at December 31, 2024.
After consideration of the Company’s cumulative loss position as of December 31, 2025, the Company retained a full valuation allowance related to its U.S.-based deferred tax assets of $75.0 million at December 31, 2025. Liquidity and Capital Resources The Company’s principal sources of liquidity are its existing cash and cash equivalents, and cash generated by operations.
The period-over-period change in interest income (expense), net of $6.5 million was primarily related to the amortization of the discount and debt issuance costs and stated interest expense related to the Notes, which were fully retired effective December 31, 2023. (Benefit) provision for income tax expense.
Interest expense, net was $0.4 million for the year ended December 31, 2025 and interest income, net was $0.1 million for the year ended December 31, 2024. The period-over-period change in interest income (expense), net of $0.5 million was primarily related to interest expense associated financing arrangements, amortization of debt issuance costs and discount, and interest incurred on short-term obligations.
The key to our longevity, however, is not simply technological innovation, but our focus on understanding our customers’ needs and delivering value. In 2024, our revenues declined by 50% to $20.6 million, primarily driven by an $18.1 million decline in revenues in our Family Safety product line, coupled with a $2.3 million decline in ViewSpot revenues.
The key to our longevity, however, is not simply technological innovation, but our focus on understanding our customers’ needs and delivering value.
An impairment charge was recorded during the first quarter of 2024 as a result of an interim triggering event leading to an analysis, whereby we concluded that the carrying value of our single reporting unit exceed its fair value by $24.0 million. We did not have a similar charge in the prior year.
There were no such amounts for the year ended December 31, 2024 Goodwill impairment. A goodwill impairment charge of $11.1 million was recorded for the year ended December 31, 2025 due to an analysis whereby we concluded that the carrying value of our single reporting unit exceeded its fair value.
ASC 350, Intangibles- Goodwill and Other, w e are required to periodically assess the recoverability of the carrying value of our goodwill at least annually during the fourth quarter of the fiscal year or whenever events or circumstances indicate a potential impairment.
Goodwill and Intangible Assets In accordance with FASB ASC Topic No. 350, Intangibles-Goodwill and Other , Smith Micro reviews the recoverability of the carrying value of the Company's single reporting unit goodwill at least annually or whenever events or circumstances indicate a potential impairment. The annual impairment testing date is December 31 of each year.
Our working capital requirements will depend on many factors, including the ability to obtain sufficient subscribers, and therefore revenue, from our customers to cover the current level of operating expenses to achieve a level of profitability. As of December 31, 2024, our cash and cash equivalents were approximately $2.8 million and we had no outstanding debt.
As of December 31, 2025, the Company's cash and cash equivalents were approximately $1.5 million. Since December 31, 2024, we have utilized cash collections, including the proceeds from the sale of our ViewSpot product, cash proceeds from our various equity and debt offerings, and cash on hand to cover routine working capital requirements.
Removed
Our portfolio includes family safety software solutions to support families in the digital age and a wide range of products for creating, sharing, and monetizing rich content, such as visual voice messaging, retail content display optimization and performance analytics on any product set.
Added
Introduction and Overview Smith Micro provides software solutions that simplify and enhance the mobile experience to some of the leading wireless service providers around the globe.
Removed
The revenue decline was primarily associated with the impact of the loss of a Tier 1 Family Safety contract, which concluded in November 2023. The revenues associated with that customer accounted for approximately 36% of our total revenues for 2023 and we recognized no revenues related to that contract in 2024.
Added
In 2025, our revenues declined by 16% to $17.4 million, primarily driven by an $2.3 million decline in revenues in our Family Safety product line, which primarily resulted from decreases associated with legacy Sprint Safe & Found revenue as subscribers migrate to the T-Mobile network and a one-time event with one of our existing deployments that resulted in reduced revenue, coupled with a $1.0 million decline in ViewSpot revenues, partially offset by an increase of $0.1 million in CommSuite revenues.
Removed
Other factors impacting the decline in revenues were the losses of two ViewSpot contracts, coupled with T-Mobile's efforts to migrate legacy Sprint subscribers to the T-Mobile network, which has impacted our revenues associated with legacy Sprint subscribers.
Added
In connection with the preparation of our second quarter 2025 financial statements, we evaluated our goodwill and determined that the carrying value of our single reporting unit exceeded its fair value which resulted in a non-cash pretax impairment charge of $11.1 million for the quarter.
Removed
To address the impact of that Tier 1 Family Safety contract termination, starting in the first quarter of 2023 and continuing in 2024, we undertook multiple restructuring efforts that have resulted in the elimination of approximately 48% of the Company's global workforce.
Added
On June 3, 2025, we divested our ViewSpot product for total consideration of $1.3 million, of which $1.0 million was paid on the closing date, with the remaining amounts collected on July 1, 2025 and October 1, 2025.
Removed
These decreases resulted in an 18% reduction in operating expenses, excluding goodwill impairment, in 2024 as compared to 2023, which follows a 26% reduction in operating expenses in 2023 as compared to 2022. The net loss for 2024 was $48.7 million, resulting in a net loss of $3.94 per basic and diluted share.
Added
Our operating expenses decreased in 2025 compared to 2024 by $21.9 million, primarily due to the non-cash goodwill impairment charge of $11.1 million in 2025 compared to a non-cash impairment charge of $24.0 million in 2024 and a continued focus on further cost reduction activities throughout the course of 2024 and 2025.
Removed
We believe that we remain strategically positioned to offer our market-leading family safety platform to the majority of U.S. mobile subscribers as we provide white-label Family Safety applications to two Tier 1 wireless carriers operating in the United States.
Added
The net loss attributable to common stockholders for 2025 was $30.1 million, resulting in a net loss attributable to common stockholders of $1.46 per basic and diluted share.
Removed
Further, a Tier 1 carrier in Europe launched a new SafePath-based family safety solution in the fourth quarter of 2024 and began conducting robust marketing activities related to that solution during the first quarter of 2025.
Added
In 2025, we received approximately $1.5 million in gross proceeds from a registered direct offering of Common Stock and a concurrent private placement of warrants, approximately $1.2 million in exchange for short-term notes and warrants and subsequently approximately $2.7 million from concurrent registered direct and private placement offerings of Common Stock and in each case a concurrent private placement of warrants.
Removed
We believe that we have an opportunity to increase the respective subscriber bases, and in turn, grow the revenues associated with these Tier 1 carriers.
Added
Additionally, in October 2025, we announced strategic cost reductions (in addition to those noted in the paragraph above) in our organization, primarily comprised of workforce reorganization, which we expect to result in cost savings of approximately $7.2 million reduction in costs for 2026.
Removed
In addition, with the recent expansion of our SafePath product line, most notably with SafePath Kids and SafePath OS, we believe that we are well-positioned to grow our Family Safety revenues more broadly with these Tier 1 carriers as well as with other operators in our industry.
Added
These efforts are part of our broader initiative to realign the Company's cost structure with long-term business goals, strengthen the financial foundation, and accelerate our path to profitability.
Removed
Adjustments to fair value at each period end as the result of installment payments extinguishing principal associated with the convertible notes, including derivatives. 23 Table of Contents Interest income (expense), net. Interest income is primarily related to interest earned on cash equivalents.
Added
Refer to section titled "Liquidity and Capital Resources" for discussion of significant material changes in cash and Note 6 of our Notes to the Consolidated Financial Statements for discussion regarding the changes related to the notes payable and warrant liabilities. 23 Table of Contents Results of Operations On April 3, 2024, we filed a certificate of amendment to our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a one-for-eight (1:8) reverse stock split of the shares of the Company's Common Stock, par value $0.001 per share, with an effective time of 11:59 p.m., Eastern Time on April 10, 2024 (the "Reverse Stock Split").
Removed
Selling and marketing expenses were $8.9 million and $11.1 million for the years ended December 31, 2024 and 2023, respectively.
Added
At the effective time, every eight shares of our Common Stock, whether issued and outstanding or held by the Company as treasury stock were automatically combined and converted (without any further act) into one share of fully paid and nonassessable Common Stock, with any fractional shares resulting from the Reverse Stock Split rounded up to the nearest whole share.
Removed
Loss on derecognition of debt. The loss recognized on derecognition of debt for the year ended December 31, 2023 was $4.0 million.
Added
See further information in Note 1. All shares and per share amounts in this Report have been retroactively adjusted for all periods presented to give effect to the Reverse Stock Split.
Removed
This resulted from installment payments made on the convertible notes issued under the Note and Stock offering in August 2022 (the "Notes") in the form of shares, and the required derecognition of the net debt position related to that principal balance, including the derivative, and discounts.
Added
The decline in ViewSpot revenue was due to a contract concluding during 2024 and the sale of that product in June 2025. Cost of revenues . Cost of revenues were $4.5 million and $6.1 million for the years ended December 31, 2025 and 2024, respectively.
Removed
There was no commensurate loss in the year ended December 31, 2024 as the convertible notes were retired at maturity as of December 31, 2023. 24 Table of Contents Interest income (expense), net. Interest income, net was $0.1 million for the year ended December 31, 2024 and interest expense, net was $6.4 million for the year ended December 31, 2023.
Added
On June 3, 2025, we divested our ViewSpot product for total consideration of $1.3 million, of which $1.0 million was paid on the closing date, with the remaining amounts paid in two installments, the first of which was collected on July 1, 2025, and the final balance was collected on October 1, 2025.
Removed
Liquidity and Capital Resources Our principal sources of liquidity are our existing cash and cash equivalents, and cash generated by operations. We have in the past also generated cash from equity and debt financings. Our primary needs for liquidity relate to working capital requirements for operations.

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