News Release

Spok Reports 2021 First Quarter Results

Alexandria Va. (April 28, 2021) – Spok Holdings, Inc. (NASDAQ: SPOK), a global leader in healthcare communications, today announced results for the first quarter ended March 31, 2021. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.125 per share, payable on June 24, 2021, to stockholders of record on May 25, 2021.

Key First Quarter 2021 Operating Highlights:

  • First quarter 2021 software revenue of $15.9 million included $9.4 million of maintenance revenue and $6.5 million of operations revenue. This was consistent with first quarter 2020 software revenue of $15.9 million, which included $9.7 million of maintenance revenue and $6.2 million of operations revenue.
  • Software bookings in the first quarter of 2021 totaled $14.6 million, compared to $15.6 million in the prior year quarter. First quarter software bookings included Spok Go® deals with an aggregate total contract value of approximately $0.7 million. First quarter software bookings also included $5.9 million of legacy operations bookings and $8.0 million of maintenance renewals. As of March 31, 2021, the software revenue backlog totaled $48.8 million, compared to the backlog of $49.1 million at March 31, 2020.
  • The quarterly rate of paging unit erosion was 1.2% in the first quarter of 2021, compared to paging unit erosion of 1.3% in the first quarter of 2020. Gross disconnects were down on a year-over-year basis.
  • Total paging ARPU (average revenue per unit) in the first quarter of 2021 totaled $7.34, up from ARPU of $7.31 in the first quarter of 2020, primarily due to the recovery of Telecommunications Service Charges (TRS) that began in early 2021, and general increases of Universal Service Fees (USF). USF and TRS fees are effectively pass-through items that have corresponding costs associated with them. Excluding these pass-through items, ARPU would have declined in-line with historical trends.
  • Operating expenses in the first quarter of 2021 totaled $37.8 million, down from $41.4 million in the first quarter of 2020. Adjusted operating expenses (which excludes depreciation, amortization and accretion charges, and includes capitalized software development costs) totaled $38.0 million in the first quarter of 2021, down more than 7% from adjusted operating expenses of $40.9 million in the first quarter of 2020.
  • Capital expenses were $0.7 million in the first quarter of 2021, compared to $1.0 million in the first quarter of 2020.
  • The number of full-time equivalent employees as of March 31, 2021 totaled 603, compared to 620 at March 31, 2020.
  • Capital paid to stockholders in the first quarter of 2021 aggregated $2.7 million. This came in the form of the Company’s regular quarterly dividend.
  • The Company’s cash, cash equivalents and short-term investments balance as of March 31, 2021, was $71.6 million, compared to $78.7 million at December 31, 2020.

2021 First Quarter Results:

Consolidated revenue for the first quarter of 2021 under Generally Accepted Accounting Principles (“GAAP”) was $36.0 million, compared to $37.3 million in the first quarter of 2020.

For the three months ended
(Dollars in thousands) March 31, 2021 March 31, 2020 Change (%)
Wireless revenue
Paging revenue $ 19,353 $ 20,451 (5.4) %
Product and other revenue 767 935 (18.0) %
Total wireless revenue $ 20,120 $ 21,386 (5.9) %
Software revenue
License $ 1,507 $ 955 57.8 %
Services $ 4,354 $ 4,549 (4.3) %
Equipment $ 616 $ 725 (15.0) %
Subscription $ 45 $ %
Maintenance 9,394 9,652 (2.7) %
Total software revenue 15,916 15,881 0.2 %
Total revenue $ 36,036 $ 37,267 (3.3) %

GAAP net loss for the first quarter of 2021 was $2.3 million, or a loss of $0.12 per basic and diluted share, compared to a net loss of $4.5 million, or a loss of $0.24 per basic and diluted share, in the first quarter of 2020. In the first quarter of 2021, adjusted EBITDA totaled $0.3 million compared to an adjusted EBITDA loss of $2.5 million in the first quarter of 2020.

For the three months ended
(Dollars in thousands) March 31, 2021 March 31, 2020 Change (%)
Net loss $ (2,297) $ (4,539) 49.4 %
Basic and diluted net loss per common share $ (0.12) $ (0.24) 50.0 %
Adjusted EBITDA $ 306 $ (2,485) 112.3 %

Management Commentary:

“We are encouraged by our performance in the first quarter and believe it sets a solid foundation for the remainder of 2021, as we continue our transition from a traditional communications company to an integrated clinical software-based business,” said Vincent D. Kelly, president and chief executive officer. “While we are still operating in a very challenging environment, we are making tangible progress executing against our strategy, and we are beginning to see benefits to our business as a result of the increasing prevalence of COVID-19 vaccines. Notably, our sales and services teams are resuming more normalized travel schedules and visiting customer sites in-person that they had been prevented from visiting since early last year.

“We launched Spok Go, our software-as-a-service, cloud-native platform just over a year ago, at the onset of the pandemic. Despite unprecedented challenges, our team was able to generate initial sales of this platform in the second half of last year, and that momentum has carried into 2021. In the first quarter, we announced the international expansion of the Spok Go platform in Canada and Australia, with localized capabilities to meet compliance and language requirements. We also added two more Spok Go wins in these markets. We also made significant progress in clinical innovation partner development, collaborating with both Mayo Clinic and St. Joseph’s Healthcare Hamilton to enhance the clinical optimization of the Spok Go platform. These partnerships are very valuable to us, as they are further evidence of the broad acceptance that our Spok Go platform is receiving and provide us insights from best-in-class organizations to enhance the capabilities of Spok Go.

“In the first quarter, we slightly grew software revenue, and our backlog was consistent with prior year levels. We believe these are significant milestones in our recovery to pre-pandemic operating performance, as it shows a comparison to the last quarter that was not materially impacted by COVID-19. Additionally, in the first quarter, we saw continued solid trends in our wireless business. We are focused on maintaining our cash, cash equivalents and short-term investments balances, and in the first quarter, we generated slightly positive cash flow from operations. We achieved these results while continuing to support our Spok Care Connect® platform and investing in Spok Go. Last year we implemented a furlough program designed to conserve cash, prevent layoffs and continue our investment while our healthcare customers struggled with the pandemic. We continued that plan into 2021 with across-the-board furloughs of one week in each of the 1st and 2nd quarters. We are ending furloughs after the second quarter and have no plans to continue them going forward,” concluded Kelly.

Business Outlook:

Michael W. Wallace, chief operating officer and chief financial officer, said, “Disciplined expense management continues to be a key focus, as we further align expense levels with market demand for our products. During the first quarter, operating expenses were down nearly 9% and adjusted operating expenses were down more than 7% from prior year levels, with improvements in most expense categories over that period.  Spok’s balance sheet remains strong, as the cash, cash equivalents and short-term investments balance was $71.6 million at March 31, 2021 and we are still operating with no debt.”

Regarding financial guidance for 2021, based on the increased visibility the Company has into the operating environment through the end of the year, and the discontinuance of the furlough program after the second quarter, Spok revised its 2021 financial guidance ranges. Spok’s revised expectations are summarized in the following table:

(Unaudited and in millions) Previous Guidance

Full Year 2021

Current Guidance

Full Year 2021

Revenue
Wireless $ 74.0 to $ 80.0 $ 77.0 to $ 81.0
Software $ 58.2 $ 67.2 $ 61.0 $ 70.0
Total Revenue $ 132.2  $ 147.2  $ 138.0  $ 151.0 
Adjusted Operating Expenses $ 142.7  $ 150.7  $ 151.0  $ 157.0 
Capital Expenditures $ 2.7  $ 6.7  $ 3.5  $ 5.5 

On April 14, 2021, in support of the Company’s Board of Directors’ ongoing annual refreshment process, Brian O’Reilly informed the Company that he will not stand for re-election to the Board at the Company’s 2021 annual meeting of stockholders. Mr. O’Reilly will remain a director and maintain his committee memberships through the 2021 annual meeting. Royce Yudkoff, chairman of the board of directors, said, “On behalf of my fellow directors, I would like to thank Brian for his many years of leadership on the Board and the significant contributions he has made to the Company.”

In addition, on June 1, 2021, the Company will publish its inaugural Environmental, Social, and Governance (ESG) Report, reflecting a continued commitment to advancing the Company’s ESG goals and sustainable business practices.

2021 Investor Day Program:

The Company also announced that it plans to host an investor day during the week of October 11th. The investor day program will feature presentations by management. The investor day will be run concurrently with Spok’s Connect ’21 customer conference in Dallas. Investors will be invited to attend the Connect ’21 keynote address and opening sessions on the first day of the conference. Investors would then be invited to a breakout session for the management presentations. The investor day will conclude at the end of the first day of the Connect ’21 conference. The Company will provide more details in future press releases.

* * * * * * * * *

2021 First Quarter Call and Replay:

Spok plans to host a conference call for investors to discuss its 2021 first quarter results at 10:00 a.m. ET on Thursday, April 29, 2021.  Dial-in numbers for the call are 1 334-323-0501 or 800-353-6461.  The confirmation code for the call is 4773192.  A replay of the call will be available from 1:00 p.m. ET on April 29, 2021 until 1:00 p.m. ET on Thursday, May 13, 2021. To listen to the replay, please register at http://tinyurl.com/Spok2021Q1earningsreplay. Please cut and paste this address into your browser, enter the registration information, and you will be given access to the replay.

*********

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: adjusted operating expenses and adjusted EBITDA. Adjusted operating expenses excludes depreciation, amortization and accretion, and includes capitalized software development costs. Adjusted EBITDA represents net income/(loss) before interest income/expense, income tax expense/benefit, depreciation, amortization and accretion expense, stock based compensation expense, and includes capitalized software development costs.

We believe that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to Spok’s financial condition and results of operations. We use these non-GAAP measures for financial, operational and budgetary decision-making purposes, to understand and evaluate our core operating performance and trends, and to generate future operating plans. We believe that these non-GAAP financial measures permit us to more thoroughly analyze key financial metrics used to make operational decisions and allow us to assess our core operating results. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other software companies who present similar non-GAAP financial measures. We adjust for certain items because we do not regard these costs as reflective of normal costs related to the ongoing operation of the business in the ordinary course. In general, these items possess one or more of the following characteristics; non-cash expenses, factors outside of our control, items that are non-operational in nature, and unusual items not expected to occur in the normal course of business.

We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures, which are included in this press release, and not to rely on any single financial measure to evaluate our business

Tables to Follow

SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)
(Unaudited and in thousands except share, per share amounts and ARPU)
For the three months ended
3/31/2021 3/31/2020
Revenue:
Wireless $ 20,120 $ 21,386
Software 15,916 15,881
Total revenue 36,036  37,267 
Operating expenses:
Cost of revenue 7,241 8,264
Research and development 4,506 5,449
Technology operations 7,252 7,904
Selling and marketing 4,900 6,361
General and administrative 11,150 11,251
Depreciation, amortization and accretion 2,727 2,146
Total operating expenses 37,776  41,375 
% of total revenue 104.8 % 111.0 %
Operating loss (1,740) (4,108)
% of total revenue (4.8) % (11.0) %
Interest income 61 363
Other expense (27) (137)
Loss before income taxes (1,706) (3,882)
Provision for income taxes (591) (657)
Net loss $ (2,297) $ (4,539)
Basic and diluted net loss per common share $ (0.12) $ (0.24)
Basic and diluted weighted average common shares outstanding 19,272,786 18,958,716
Cash dividends declared per common share 0.125 0.125
Key statistics:
Units in service 874 926
Average revenue per unit (ARPU) $ 7.34 $ 7.31
Bookings $ 14,597 $ 15,639
Backlog $ 48,849 $ 49,052
(a) Slight variations in totals are due to rounding.
SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)
(Unaudited and in thousands except share, per share amounts and ARPU)
For the three months ended
3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019
Revenue:
Wireless $ 20,120 $ 20,300 $ 20,828 $ 21,078 $ 21,386 $ 21,615 $ 21,814 $ 22,127
Software 15,916 17,180 16,865 14,661 15,881 17,933 17,639 17,398
Total revenue 36,036  37,480  37,693  35,739  37,267  39,548  39,453  39,525 
Operating expenses:
Cost of revenue 7,241 7,833 6,544 5,901 8,264 8,051 7,190 7,239
Research and development 4,506 4,166 3,459 2,754 5,449 7,132 7,437 6,807
Technology operations 7,252 7,371 7,357 7,212 7,904 8,083 7,805 7,866
Selling and marketing 4,900 5,004 4,272 3,831 6,361 5,891 5,595 5,574
General and administrative 11,150 10,046 10,994 10,810 11,251 11,531 11,813 11,696
Depreciation, amortization and accretion 2,727 2,503 2,335 2,072 2,146 2,250 2,305 2,335
Goodwill impairment 25,007 8,849
Total operating expenses 37,776  61,930  34,961  32,580  41,375  51,787  42,145  41,517 
% of total revenue 104.8 % 165.2 % 92.8 % 91.2 % 111.0 % 130.9 % 106.8 % 105.0 %
Operating (loss) income (1,740) (24,450) 2,732  3,159  (4,108) (12,239) (2,692) (1,992)
% of total revenue (4.8) % (65.2) % 7.2 % 8.8 % (11.0) % (30.9) % (6.8) % (5.0) %
Interest income 61 51 127 146 363 350 399 452
Other (expense) income (27) 95 151 101 (137) 206 163 602
(Loss) income before income taxes (1,706) (24,304) 3,010  3,406  (3,882) (11,683) (2,130) (938)
(Provision for) benefit from income taxes (591) (22,306) 155 353 (657) 2,172 804 268
Net (loss) income $ (2,297) $ (46,610) $ 3,165  $ 3,759  $ (4,539) $ (9,511) $ (1,326) $ (670)
Basic net (loss) income per common share $ (0.12) $ (2.44) $ 0.17 $ 0.20 $ (0.24) $ (0.50) $ (0.07) $ (0.03)
Diluted net (loss) income per common share (0.12) (2.44) 0.16 0.20 (0.24) (0.50) (0.07) (0.03)
Basic weighted average common shares outstanding 19,272,786 19,088,329 19,051,502 19,016,853 18,958,716 18,860,020 19,086,811 19,217,866
Diluted weighted average common shares outstanding 19,272,786 19,088,329 19,208,452 19,115,148 18,958,716 18,860,020 19,086,811 19,217,866
Key statistics:
Units in service 874 885 898 915 926 938 955 977
Average revenue per unit (ARPU) $ 7.34 $ 7.30 $ 7.34 $ 7.24 $ 7.31 $ 7.33 $ 7.32 $ 7.26
Bookings $ 14,597 $ 16,528 $ 21,414 $ 15,411 $ 15,639 $ 21,932 $ 20,421 $ 21,334
Backlog $ 48,849 $ 50,504 $ 51,708 $ 48,441 $ 49,052 $ 50,553 $ 42,604 $ 39,718
(a) Slight variations in totals are due to rounding.
SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (a)
(In thousands)
3/31/2021 12/31/2020
ASSETS Unaudited
Current assets:
Cash and cash equivalents $ 41,646 $ 48,729
Short term investments 29,996 29,995
Accounts receivable, net 28,675 29,934
Prepaid expenses 8,284 8,958
Other current assets 1,681 1,269
Total current assets 110,282  118,885 
Non-current assets:
Property and equipment, net 7,421 7,815
Operating lease right-of-use assets 17,636 14,016
Capitalized software development, net 12,064 10,179
Goodwill 99,175 99,175
Intangible assets, net 417
Deferred income tax assets, net 25,223 25,826
Other non-current assets 875 978
Total non-current assets 162,394  158,406 
Total assets $ 272,676  $ 277,291 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 4,451 $ 6,685
Accrued compensation and benefits 13,084 14,103
Deferred revenue 26,743 27,686
Operating lease liabilities 6,037 5,264
Other current liabilities 3,923 3,702
Total current liabilities 54,238  57,440 
Non-current liabilities:
Asset retirement obligations 7,402 7,289
Operating lease liabilities 12,640 9,456
Other non-current liabilities 1,824 2,493
Total non-current liabilities 21,866  19,238 
Total liabilities 76,104  76,678 
Commitments and contingencies
Stockholders’ equity:
Preferred stock $ $
Common stock 2 2
Additional paid-in capital 92,575 91,780
Accumulated other comprehensive loss (1,438) (1,452)
Retained earnings 105,433 110,283
Total stockholders’ equity 196,572  200,613 
Total liabilities and stockholders’ equity $ 272,676  $ 277,291 
(a) Slight variations in totals are due to rounding.
SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a)
(Unaudited and in thousands)
For the three months ended
3/31/2021 3/31/2020
Operating activities:
Net loss $ (2,297) $ (4,539)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, amortization and accretion 2,727 2,146
Deferred income tax expense 510 790
Stock-based compensation 2,239 1,182
Provisions for doubtful accounts, service credits and other 215 18
Changes in assets and liabilities:
Accounts receivable 1,039 2,441
Prepaid expenses and other assets 457 238
Net operating lease liabilities 338 (77)
Accounts payable, accrued liabilities and other (3,038) (340)
Deferred revenue (1,471) (542)
Net cash provided by operating activities 719  1,317 
Investing activities:
Purchases of property and equipment (727) (1,049)
Capitalized software development (2,920) (1,705)
Purchase of short-term investments (14,995) (14,888)
Maturity of short-term investments 15,000 15,000
Net cash used in investing activities (3,642) (2,642)
Financing activities:
Cash distributions to stockholders (2,730) (2,629)
Purchase of common stock for tax withholding on vested equity awards (1,444) (903)
Net cash used in financing activities (4,174) (3,532)
Effect of exchange rate on cash 14 (220)
Net decrease in cash and cash equivalents (7,083) (5,077)
Cash and cash equivalents, beginning of period 48,729 47,361
Cash and cash equivalents, end of period $ 41,646  $ 42,284 
Supplemental disclosure:
Income taxes paid $ (118) $
(a) Slight variations in totals are due to rounding.
SPOK HOLDINGS, INC.
CONSOLIDATED REVENUE
SUPPLEMENTAL INFORMATION (a)
(Unaudited and in thousands)
For the three months ended
3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019
Revenue
Paging $ 19,353 $ 19,513 $ 19,961 $ 19,990 $ 20,451 $ 20,826 $ 21,212 $ 21,342
Non-paging $ 767 $ 787 $ 867 $ 1,088 $ 935 $ 789 $ 602 $ 785
Total wireless revenue $ 20,120  $ 20,300  $ 20,828  $ 21,078  $ 21,386  $ 21,615  $ 21,814  $ 22,127 
License $ 1,507 $ 1,486 $ 1,988 $ 749 $ 955 $ 1,711 $ 2,723 $ 1,676
Services $ 4,354 $ 4,778 $ 4,772 $ 3,812 $ 4,549 $ 4,947 $ 4,202 $ 4,835
Equipment $ 616 $ 961 $ 554 $ 601 $ 725 $ 1,125 $ 689 $ 842
Subscription $ 45 $ 42 $ 24 $ $ $ $ $
Operations revenue $ 6,522  $ 7,267  $ 7,338  $ 5,162  $ 6,229  $ 7,783  $ 7,614  $ 7,353 
Maintenance revenue $ 9,394  $ 9,913  $ 9,527  $ 9,499  $ 9,652  $ 10,150  $ 10,025  $ 10,045 
Total software revenue $ 15,916  $ 17,180  $ 16,865  $ 14,661  $ 15,881  $ 17,933  $ 17,639  $ 17,398 
Total revenue $ 36,036  $ 37,480  $ 37,693  $ 35,739  $ 37,267  $ 39,548  $ 39,453  $ 39,525 
(a) Slight variations in totals are due to rounding.
SPOK HOLDINGS, INC.
CONSOLIDATED OPERATING EXPENSES
SUPPLEMENTAL INFORMATION (a)
(Unaudited and in thousands)
For the three months ended
3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019
Cost of revenue
Payroll and related $ 5,369 $ 5,447 $ 4,941 $ 4,350 $ 5,785 $ 5,222 $ 5,099 $ 4,749
Cost of sales 1,251 1,740 1,064 1,098 1,940 2,278 1,567 1,900
Stock-based compensation 322 136 148 134 119 42 21 97
Other 299 510 391 319 420 509 503 493
Total cost of revenue 7,241  7,833  6,544  5,901  8,264  8,051  7,190  7,239 
Research and development
Payroll and related 4,475 4,358 4,147 4,115 4,761 5,056 5,083 4,639
Outside services 2,277 2,358 2,113 1,803 1,584 1,742 2,027 1,912
Capitalized software development (2,920) (3,046) (2,906) (3,596) (1,705)
Stock-based compensation 475 246 240 243 236 113 102 84
Other 199 250 (135) 189 573 221 225 172
Total research and development 4,506  4,166  3,459  2,754  5,449  7,132  7,437  6,807 
Technology operations
Payroll and related 2,467 2,467 2,246 2,213 2,712 2,656 2,823 2,662
Site rent 3,196 3,313 3,467 3,399 3,398 3,669 3,269 3,480
Telecommunications 837 857 949 961 1,001 1,026 1,016 1,019
Stock-based compensation 137 48 52 47 43 32 30 30
Other 615 686 643 592 750 700 667 675
Total technology operations 7,252  7,371  7,357  7,212  7,904  8,083  7,805  7,866 
Selling and marketing
Payroll and related 3,135 2,912 2,773 2,538 3,583 3,382 3,524 3,329
Commissions 1,105 1,178 1,059 852 1,212 1,158 1,114 1,298
Stock-based compensation 319 192 208 194 172 164 137 128
Advertising and events 161 539 151 160 784 1,034 703 656
Other 180 183 81 87 610 153 117 163
Total selling and marketing 4,900  5,004  4,272  3,831  6,361  5,891  5,595  5,574 
General and administrative
Payroll and related 3,818 3,373 3,476 3,355 4,134 3,974 4,220 4,136
Stock-based compensation 986 726 968 744 612 770 674 690
Facility rent, office, and technology costs 2,480 2,412 178 628 43 56 402 (96)
Outside services 1,825 1,584 2,259 2,276 2,068 1,952 2,369 2,485
Taxes, licenses and permits 1,081 484 2,148 2,043 2,036 2,350 2,004 2,306
Bad debt 106 202 994 804 859 1,000 888 863
Other 854 1,265 971 960 1,499 1,429 1,256 1,312
Total general and administrative 11,150  10,046  10,994  10,810  11,251  11,531  11,813  11,696 
Depreciation, amortization and accretion 2,727 2,503 2,335 2,072 2,146 2,250 2,305 2,335
Goodwill impairment 25,007 8,849
Operating expenses $ 37,776  $ 61,930  $ 34,961  $ 32,580  $ 41,375  $ 51,787  $ 42,145  $ 41,517 
Capital expenditures $ 727  $ 638  $ 934  $ 846  $ 1,063  $ 679  $ 1,378  $ 1,495 
(a) Slight variations in totals are due to rounding.
SPOK HOLDINGS, INC.
UNITS IN SERVICE ACTIVITY, MARKET SEGMENT, CHURN
AND AVERAGE REVENUE PER UNIT (ARPU) (a)
(Unaudited and in thousands)
For the three months ended
3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019
Paging units in service
Beginning units in service (000’s) 885  898  915  926  938  955  977  982 
Gross placements 20 20 25 35 24 22 28 35
Gross disconnects (31) (33) (42) (46) (36) (39) (50) (40)
Net change (11) (13) (17) (11) (12) (17) (22) (5)
Ending units in service 874  885  898  915  926  938  955  977 
End of period units in service % of total (b)
Healthcare 84.1 % 83.6 % 83.7 % 83.6 % 82.6 % 82.4 % 81.7 % 81.7 %
Government 4.8 % 5.3 % 5.3 % 5.5 % 5.4 % 5.4 % 5.5 % 5.6 %
Large enterprise 4.3 % 4.3 % 4.3 % 4.4 % 5.5 % 5.5 % 6.1 % 5.9 %
Other(b) 6.8 % 6.8 % 6.6 % 6.6 % 6.5 % 6.6 % 6.7 % 6.8 %
Total 100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Account size ending units in service (000’s)
1 to 100 units 59 61 63 65 67 69 72 74
101 to 1,000 units 163 167 167 165 171 173 175 179
>1,000 units 652 657 668 685 688 696 708 724
Total 874  885  898  915  926  938  955  977 
Account size net loss rate(c)
1 to 100 units (3.3) % (3.2) % (2.9) % (3.1) % (3.0) % (3.8) % (2.1) % (3.2) %
101 to 1,000 units (2.4) % % 1.5 % (4.2) % (1.0) % (1.0) % (2.4) % (3.9) %
>1,000 units (0.8) % (1.6) % (2.5) % (0.4) % (1.2) % (1.8) % (2.2) % 0.7 %
Total (1.2) % (1.4) % (1.9) % (1.3) % (1.3) % (1.8) % (2.2) % (0.5) %
Account size ARPU
1 to 100 units $ 11.72 $ 11.62 $ 11.80 $ 11.65 $ 12.01 $ 11.99 $ 11.84 $ 12.00
101 to 1,000 units 8.33 8.35 8.37 8.24 8.34 8.31 8.41 8.47
>1,000 units 6.68 6.62 6.67 6.57 6.59 6.62 6.59 6.47
Total $ 7.34  $ 7.30  $ 7.34  $ 7.24  $ 7.31  $ 7.33  $ 7.32  $ 7.26 
(a) Slight variations in totals are due to rounding.
(b) Other includes hospitality, resort and indirect units
(c) Net loss rate is net current period placements and disconnected units in service divided by prior period ending units in service.
SPOK HOLDINGS, INC.
RECONCILIATION OF NET LOSS TO EBITDA (a)
(Unaudited and in thousands)
For the three months ended
3/31/2021 3/31/2020
Net loss $ (2,297) $ (4,539)
Add back:
Provision for income taxes 591 657
Other expenses 27 137
Interest income (61) (363)
Operating loss (1,740) (4,108)
Depreciation, amortization and accretion 2,727 2,146
EBITDA $ 987  $ (1,962)
Capitalized software development costs (2,920) (1,705)
Stock-based compensation 2,239 1,182
Adjusted EBITDA $ 306  $ (2,485)
(a) Slight variations in totals are due to rounding.
RECONCILIATION OF OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (a)
(Unaudited and in thousands)
For the three months ended
3/31/2021 3/31/2020
Operating expenses $ 37,776  $ 41,375 
Add back:
Depreciation, amortization and accretion (2,727) (2,146)
Capitalized software development costs 2,920 1,705 
Adjusted operating expenses $ 37,969  $ 40,934 
(a) Slight variations in totals are due to rounding.
(Unaudited and in millions)
Previous Guidance Full Year 2021 Current Guidance Full Year 2021
Operating expenses $ 141.4  to $ 149.4  $ 149.7  to $ 155.7 
Add back:
Depreciation, amortization and accretion (10.2) (10.2) (10.2) (10.2)
Capitalized software development costs 11.5 11.5 11.5 11.5
Adjusted operating expenses $ 142.7  $ 150.7  $ 151.0  $ 157.0