Posted on January 12, 2021 by Aaron Warwick
Ahead of their presentation today at the 23rd Annual Needham Growth Conference, Smith Micro (SMSI) updated the Investor Presentation on their Investor Relations webpage. Of particular note is page 23, shown below.
This slide speaks volumes. To wit, SMSI signed four new customers in Q4 2020. The only bad news so far is that SMSI clearly has not received the “green light” to announce who these customers are just yet. My research indicates the reason for this is that the respective companies want to maintain any possible competitive advantage they currently enjoy. In other words, they hope to launch their new SMSI product and see some traction before their competitors are aware of who they are using for SMSI’s white-labeled products and are then able to reach out to SMSI for something similar.
In any case, this new development simply confirms, directly and publicly from the company itself, what my research led me to believe already: that SMSI won customers in Q4 2020, but was unable to publicly announce those wins. You can read my latest article on SMSI on Seeking Alpha to see why I think SMSI has now significantly de-risked. This investor presentation update is further evidence of SMSI’s de-risking as it helps to broaden SMSI’s customer base. As the presentation notes on another slide, even amidst SMSI being in its current “investment phase,” the company remains profitable and cash-flow positive. Once the company re-enters a growth phase–likely by EOY 2021–they will simply be printing cash.
Disclosure: I am long SMSI and may buy or sell at any time.