News Release

Spok Reports First Quarter 2024 Results

Total year-over-year revenue growth exceeds 5%

Software year-over-year revenue growth over 15%

Net income and adjusted EBITDA up 35.9% and 9.2%, respectively, from the prior year period

Alexandria, Va. (May 1, 2024) – Spok Holdings, Inc. (NASDAQ: SPOK), a global leader in healthcare communications, today announced results for the first quarter ended March 31, 2024. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.3125 per share, payable on June 24, 2024, to stockholders of record on May 24, 2024.

Recent Highlights:

  • Generated net income of $4.2 million, or $0.21 per diluted share, in the first quarter, compared to net income of $3.1 million, or $0.15 per diluted share, in the prior year period
  • Generated $7.5 million of adjusted EBITDA in the first quarter, compared to $6.9 million in the first quarter of 2023
  • Software operations bookings totaled $7.9 million in the first quarter, up 39% from the prior year period
  • First quarter 2024 Software operations bookings included 19 six-figure customer contracts
  • Software revenue totaled $16.3 million first quarter of 2024, up 15% from the prior year period
  • First quarter 2024 Wireless average revenue per unit (ARPU) was $7.89, up on a year-over-year basis
  • Improvement in quarterly net unit churn at 6% in the first quarter, down from 2.5% in the prior quarter, with annual net unit churn of 7.2% on a trailing-twelve-month basis
  • Wireless revenue of $18.6 million in the first quarter of 2024, compared to revenue of $19.0 million in the same period in 2023
  • Capital returned to stockholders in the first quarter of 2024 totaled $6.3 million in the form of the Company’s quarterly dividend
  • Cash and cash equivalents balance of $23.3 million on March 31, 2024, and no debt

“I am proud of the strong performance our team was able to deliver in the first quarter and believe these results position us well for the remainder of the year, as we continue to execute on generating cash flow and returning capital to stockholders, while responsibly investing in and growing our business,” said Vincent D. Kelly, chief executive officer of Spok Holdings, Inc. “In the first quarter, we made tremendous progress in several key performance areas, including software revenue growth, wireless trends, software operations bookings and backlog levels. We were able to accomplish this while investing in our Spok Care Connect and Wireless solutions. I am particularly pleased with our performance in generating software operations bookings in the first quarter, which were up 39% on a year-over-year-basis. In fact, the $7.9 million of software operations bookings in the first quarter was the second highest first quarter performance in our history. The strong level of software operations bookings in the first quarter resulted in a more than 62% increase in software license revenue from the prior year quarter and drove total revenue growth of more than 5%.

“I believe Spok is doing an excellent job of balancing the necessary investments in our products and infrastructure in order to fuel future growth and continuing to return capital to our stockholders,” continued Kelly. “In the first quarter, we generated over $4.2 million of net income and over $7.5 million of adjusted EBITDA, which covered the $6.3 million we returned to our stockholders. However, at the same time, we increased the first quarter research and development investment in our products by $0.5 million, or 18.4%, on a year-over-year basis, and believe we are on track to invest approximately $11.0 million in product research and development expenses in 2024. We believe that this investment will fuel future growth and that our extensive experience operating our established communication solutions will create significant value for stockholders by maximizing revenue and cash flow generation.

“We were very pleased with our performance in the first quarter and believe that it provides a solid springboard for 2024. As a result, we are reiterating our guidance estimates for revenue and adjusted EBITDA generation for this year. At the midpoint of that guidance range, we believe we are on track to again grow consolidated revenue in 2024, on a year-over-year basis, with slight declines in wireless revenue being more than offset by continued growth in software revenue. We also anticipate that the midpoint of our adjusted EBITDA guidance will be consistent with 2023, with additional growth potential at the high-end of the guidance range. Of course, we will continue to update you on our outlook each quarter when we report our results,” concluded Kelly.

Financial Highlights:

For the three months ended March 31,
(Dollars in thousands)20242023Change (%)
Wireless revenue
Paging revenue$           17,970$           18,525(3.0) %
Product and other revenue                  625                  50324.3  %
Total wireless revenue$           18,595$           19,028(2.3) %
Software revenue
License$             2,626$             1,61862.3  %
Professional services               4,025               3,23924.3  %
Hardware                  384                  3567.9  %
Maintenance               9,279               8,9393.8  %
Total software revenue             16,314             14,15215.3  %
Total revenue$           34,909$           33,1805.2  %
For the three months ended March 31,
(Dollars in thousands)20242023Change (%)
Operating expenses$           30,018$           28,4635.5  %
Net income$             4,236$             3,11735.9  %
Cash, cash equivalents, and short-term investments (as of period end)$           23,340$           29,550(21.0) %
Capital returned to stockholders$             7,386$             6,9336.5  %
Adjusted operating expenses$           28,522$           27,2174.8  %
Adjusted EBITDA$             7,535$             6,8999.2  %


For the three months ended March 31,
(Dollars in thousands, excluding units in service and ARPU)20242023Change (%)
Key Statistics
Wireless units in service (000’s)                  753                  811(7.2) %
Wireless average revenue per unit (ARPU)$               7.89$               7.594.0  %
Software operations bookings(1)$             7,885$             5,67838.9  %
Software backlog (as of period end)$           57,980$           46,54024.6  %

(1) Software operations bookings includes net new (i.e., new customers or incremental add-on sales to existing customers) sales of license, professional services, equipment, and first-year maintenance.

Financial Outlook:

Regarding financial guidance, the Company reiterated the following expectations for the full year 2024:

(Unaudited and in millions)Current Guidance

Full Year 2024

Wireless$                              72.0$                              75.0
Software$                              64.0$                              69.0
Total Revenue$                            136.0  $                            144.0 
Adjusted EBITDA$                              27.5  $                              32.5 

2024 First Quarter Call:

Management will host a conference call and webcast to discuss these financial results on Wednesday, May 1, 2024, at 5:00 p.m. Eastern Time. The presentation is open to all interested parties and may include forward-looking information.

Conference Call Details

Date/Time:Wednesday, May 1, 2024, at 5:00 p.m. ET
U.S. Toll-Free Dial In:877-407-0890
International Dial In:1-201-389-0918

To access the call, please dial in approximately ten minutes before the start of the call. For those unable to join the live call, an OnDemand version of the webcast will be available following the call under the URL link and on the investor relations website.

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 expense, impairment of intangible assets and severance and restructuring costs. Adjusted EBITDA represents net income/(loss) before interest income/expense, income tax benefit/expense, depreciation, amortization and accretion expense, stock-based compensation expense, impairment of intangible assets and severance and restructuring. With respect to our expectations under “Financial Guidance” above, reconciliation of adjusted EBITDA to net income is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and uncertainty with respect to certain items included in net income that are excluded from adjusted EBITDA, in particular, income tax benefit/expense, stock-based compensation expenses, impairment of intangible assets, severance and restructuring and other non-recurring expenses. These items can have unpredictable fluctuations based on unforeseen activity that is out of our control and/or cannot be reasonably predicted.

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 believe it is important to exclude these costs, given that they do not represent future operational costs under this strategic business plan. This allows us to assess the underlying performance of our core business under this new strategic business plan.

We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principle of these non-GAAP financial measures is that they exclude significant amounts 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 items 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

(Unaudited and in thousands except share, per share amounts and ARPU)
For the three months ended
Wireless$                       18,595$                       19,028
Software                         16,314                         14,152
Total revenue                         34,909                              33,180    
Operating expenses:
Cost of revenue (exclusive of items shown separately below)                           7,139                           6,536
Research and development                           2,951                           2,493
Technology operations                           6,299                           6,587
Selling and marketing                           4,149                           3,901
General and administrative                           7,984                           7,700
Depreciation and accretion                           1,068                           1,236
Severance and restructuring                              428                                10
Total operating expenses                         30,018                              28,463    
% of total revenue86.0  %85.8  %
Operating income                           4,891                                4,717    
% of total revenue14.0  %14.2  %
Interest income                              254                              272
Other (expense) income                                (2)                                53
Income before income taxes                           5,143                                5,042    
Provision for income taxes                            (907)                         (1,925)
Net income$                         4,236     $                         3,117    
Basic net income per common share$                           0.21$                           0.16
Diluted net income per common share$                           0.21$                           0.15
Basic weighted average common shares outstanding                   20,170,548                   19,897,445
Diluted weighted average common shares outstanding                   20,446,587                   20,182,692
Cash dividends declared per common share                         0.3125                         0.3125


(In thousands)
Current assets:
Cash and cash equivalents$                           23,340$                           31,989
Accounts receivable, net                            21,722                            23,314
Prepaid expenses                              7,198                              7,885
Other current assets                                 672                                 704
Total current assets                            52,932                              63,892 
Non-current assets:
Property and equipment, net                              7,306                              7,321
Operating lease right-of-use assets                              9,803                            10,526
Goodwill                            99,175                            99,175
Deferred income tax assets, net                            45,348                            46,260
Other non-current assets                                 451                                 510
Total non-current assets                           162,083                             163,792 
Total assets$                         215,015  $                         227,684 
Current liabilities:
Accounts payable$                             3,809$                             5,969
Accrued compensation and benefits                              3,419                              7,284
Deferred revenue                            24,998                            26,298
Operating lease liabilities                              3,773                              4,184
Other current liabilities                              3,890                              4,273
Total current liabilities                            39,889                              48,008 
Non-current liabilities:
Asset retirement obligations                              7,205                              7,191
Operating lease liabilities                              6,630                              6,902
Other non-current liabilities                              1,122                              1,812
Total non-current liabilities                            14,957                              15,905 
Total liabilities                            54,846                              63,913 
Commitments and contingencies
Stockholders’ equity:
Preferred stock$                                  —$                                  —
Common stock                                     2                                     2
Additional paid-in capital                           101,656                           102,936
Accumulated other comprehensive loss                             (1,722)                             (1,764)
Retained earnings                            60,233                            62,597
Total stockholders’ equity                           160,169                             163,771 
Total liabilities and stockholders’ equity$                         215,015  $                         227,684 
(Unaudited and in thousands)
For the three months ended
Operating activities:
Net income$                             4,236 $                             3,117
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and accretion                              1,068                              1,236
Deferred income tax expense                                 902                              1,886
Stock-based compensation                              1,148                                 936
Provisions for credit losses, service credits and other                                 272                                   29
Changes in assets and liabilities:
Accounts receivable                              1,318                              4,187
Prepaid expenses and other assets                                 779                                (282)
Net operating lease liabilities                                   41                                (197)
Accounts payable, accrued liabilities and other                             (6,405)                             (6,680)
Deferred revenue                             (1,361)                             (1,621)
Net cash provided by operating activities                              1,998                               2,611
Investing activities:
Purchases of property and equipment                                (875)                                (649)
Net cash used in investing activities                                (875)                                (649)
Financing activities:
Cash distributions to stockholders                             (7,386)                             (6,933)
Purchase of common stock for tax withholding on vested equity awards                             (2,428)                             (1,245)
Net cash used in financing activities                             (9,814)                             (8,178)
Effect of exchange rate on cash and cash equivalents                                   42                                   12
Net decrease in cash and cash equivalents                             (8,649)                             (6,204)
Cash and cash equivalents, beginning of period                            31,989                            35,754
Cash and cash equivalents, end of period$                           23,340  $                           29,550 
Supplemental disclosure:
Income taxes paid (refunded)$                                   5$                                 (6)
(Unaudited and in thousands)
For the three months ended
Account size ending units in service (000’s)
1 to 100 units           43           44           46           48           48           50           51           53
101 to 1,000 units         135         142         143         144         149         147         147         149
>1,000 units         575         579         596         614         614         620         626         633
Total         753             765             785             806             811             817             824             835   
Market segment as a percent of total ending units in service
Healthcare86.1  %85.9  %86.0  %86.1  %85.7  %85.4  %85.0  %85.0  %
Government4.1 %4.2 %4.2 %4.2 %4.3 %4.4 %4.1 %4.2 %
Large enterprise3.9 %4.1 %4.1 %4.0 %4.1 %4.0 %3.9 %4.0 %
Other(1)5.9 %5.9 %5.7 %5.7 %6.0 %6.1 %7.0 %6.8 %
Total 100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Account size ARPU
1 to 100 units$    12.66$    12.57$    12.02$    11.91$    12.03$    11.95$    11.80$    11.41
101 to 1,000 units        9.14        9.16        8.75        8.56        8.75        8.66        8.44        8.27
>1,000 units        7.23        7.15        6.97        6.94        6.95        6.86        6.69        6.63
Total$      7.89    $      7.84    $      7.59    $      7.53    $      7.59    $      7.50    $      7.40    $      7.23   
(1) Other includes hospitality, resort and indirect units
(Unaudited and in thousands)
For the three months ended
Operating expenses$                           30,018  $                           28,463 
Add back:
Depreciation and accretion                             (1,068)                             (1,236)
Severance and restructuring                                (428)                                 (10)
Adjusted operating expenses$                           28,522  $                           27,217 
(Unaudited and in thousands)
For the three months ended
Net income$                             4,236 $                             3,117
Add back:
Provision for income taxes                                 907                              1,925
Other expense (income)                                     2                                 (53)
Interest income                                (254)                                (272)
Depreciation and accretion                              1,068                              1,236
EBITDA$                             5,959 $                             5,953
Stock-based compensation                              1,148                                 936
Severance and restructuring                                 428                                   10
Adjusted EBITDA$                             7,535 $                             6,899