SMITH MICRO SOFTWARE, INC. Segments Disclosure

15. Segment, Concentration and Geographical Information

 

Segment Information

 

Public companies are required to report financial and descriptive information about their reportable operating segments as required by FASB ASC Topic No. 280, Segment Reporting (“Topic 280”). The Company has one primary business unit based on how management internally evaluates separate financial information, business activities and management responsibility: Wireless. The Wireless segment includes the Family Safety (which includes SafePath), CommSuite, and ViewSpot families of products (prior to the divestiture of ViewSpot in 2025).

 

The Company's chief operating decision maker (“CODM”) as such term is defined in Topic 280, is its President and CEO. As infrastructure and resources are shared across the Company’s operations, the CODM manages the Company's operations based on consolidated financial information for purposes of evaluating financial performance, investment, cash flow metrics and allocating resources.

 

The accounting policies of the Company's single operating segment are the same as those described in the summary of significant accounting policies appearing in Note 1. Although the CODM uses other measures of operating performance, the Company concluded that consolidated net loss is the measure required to be disclosed as the segment measure of profit or loss. Adjusted operating loss and net loss are used to evaluate the effectiveness of Smith Micro's performance and to monitor budget versus actual results. The measure of segment assets is reflected as "total assets" in the accompanying consolidated balance sheet.

 

Revenue and expenses regularly provided to the CODM are included in the following reconciliation of the Company's net adjusted operating loss and net loss. It includes the significant expense categories computed under U.S. GAAP, reconciled to the Company's total net loss as presented in the consolidated statement of operations.

 

		Year Ended December 31,
		2025				2024
Revenues		$	17,363			$	20,555
Less:
Adjusted cost of revenues1			4,504				6,100
Adjusted selling and marketing2			4,991				7,496
Adjusted research and development2			9,546				12,687
Adjusted general and administrative2			7,928				8,072
Adjusted operating loss			(9,606	)			(13,800	)
Other segment expenses3			415				(798	)
Stock-based compensation expense			(3,609	)			(4,503	)
Depreciation			(293	)			(365	)
Amortization			(5,105	)			(5,935	)
Goodwill impairment			(11,052	)			(23,989	)
Other (Expenses) Income			(153	)			680
Loss before benefit for income taxes			(29,403	)			(48,710	)
Income tax benefit			(76	)			(13	)
Net loss		$	(29,327	)		$	(48,697	)
Deemed dividend			(769	)			—
Net loss attributable to common stockholders		$	(30,096	)		$	(48,697	)

 

 

(1) Adjusted amounts exclude depreciation expense and other adjustments as further described in footnote 3 to this table.

 

(2) Adjusted amounts exclude stock-based compensation expense and other adjustments as further described in footnote 3 to this table.

 

(3) Other segment expenses include personnel severance and reorganization activities, amortization of debt discount, and other corporate non-recurring expenditures, offset by the gain on sale from the divestiture of the Company's ViewSpot product.

 

The following table presents the disaggregation of Wireless revenues by product line (in thousands):

 

		Year Ended December 31,
		2025				2024
Family Safety		$	14,121			$	16,430
CommSuite			3,100				2,956
ViewSpot			142				1,169
Total Wireless revenues		$	17,363			$	20,555

 

Concentration Information

 

The Company has certain customers whose revenues individually represented greater than 10% of the Company’s total revenues, or whose accounts receivable balances individually represented greater than 10% of the Company’s total accounts receivable.

 

For the year ended  December 31, 2025, three customers made up 60%, 21%, and 18% of revenues. For the year ended  December 31, 2024, three customers made up 58%, 20%, and 14% of revenues.

 

As of  December 31, 2025, three customers accounted for 44%, 29%, and 16% of accounts receivable, and as of  December 31, 2024, two customers accounted for 68% and 14% of accounts receivable.

 

The Company’s major customers could reduce their orders of the Company’s products in favor of a competitor's product or for any reason. The loss of these major customers or decisions by a significant customer to substantially reduce purchases could have a material adverse effect on Smith Micro’s business.

 

For the year ended  December 31, 2025, three service providers accounted for 16%, 15%, and 11% of purchases in the year, totaling 41% of trade payables as of  December 31, 2025. For the year ended  December 31, 2024, three service providers accounted for 22%, 18%, and 14% of purchases in the year, totaling 35% of trade payables as of  December 31, 2024.

 

Geographical Information

 

During the years ended  December 31, 2025 and 2024, the Company operated in two geographic locations: the Americas and Europe, Middle East and Africa (EMEA). Revenues attributed to the geographic location of the customers’ bill-to address were as follows (in thousands):

 

		Year Ended December 31,
		2025				2024
Americas		$	17,307			$	20,017
EMEA			56				538
Total revenues		$	17,363			$	20,555

 

The Company does not separately allocate specific assets to these geographic locations.