Catalyzes, at least in vitro, the hydrolysis of sphingomyelin to form ceramide and phosphocholine (PubMed:9520418). Also hydrolyzes 1-O-alkyl-2-lyso-sn-glycero-3-phosphocholine (lyso-platelet-activating factor) in vivo (By similarity). Also acts on 1-acyl-2-lyso-sn-glycero-3-phosphocholine (lyso-PC) and sphingosylphosphocholine (By similarity). a sphingomyelin + H2O = an N-acylsphing-4-enine + H(+) + phosphocholine an N-(acyl)-sphingosylphosphocholine + H2O = an N-acyl-sphingoid base + H(+) + phosphocholine 1-O-octadecyl-sn-glycero-3-phosphocholine + H2O = 1-O-octadecyl-sn-glycerol + H(+) + phosphocholine 1-hexadecanoyl-sn-glycero-3-phosphocholine + H2O = 1-hexadecanoyl-sn-glycerol + H(+) + phosphocholine a sphingosylphosphocholine + H2O = a sphingoid base + H(+) + phosphocholine 1-O-hexadecyl-sn-glycero-3-phosphocholine + H2O = 1-O-hexadecyl-sn-glycerol + H(+) + phosphocholine Activated by arachidonic acid. Optimum pH is 6.5-7.5. Lipid metabolism; sphingolipid metabolism. Although widely expressed in all tissues examined, except the spleen, high enzymatic activity occurs only in the brain. Mice lacking Smpd2 and Smpd3 are completely devoid of neutral SMase activity but do not developed sphingomyelin storage abnormalities. Belongs to the neutral sphingomyelinase family.