News Release

Spok Reports First Quarter 2025 Results

Net Income and Adjusted EBITDA Up From Prior Year

Period End Software Backlog Up More Than 15% From Prior Year

Professional Services Revenue Up Nearly 44% From Q1 2024

Plano, Tx. (April 30, 2025) – Spok Holdings, Inc. (NASDAQ: SPOK), a global leader in healthcare communications, today announced results for the first quarter ended March 31, 2025. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.3125 per share, payable on June 24, 2025, to stockholders of record on May 23, 2025.

Recent Highlights:

  • First quarter 2025 Net Income and Adjusted EBITDA up 7% and 8.9%, respectively, from the prior year period
  • Software operations bookings totaled $8.3 million in the first quarter, up 7% from the first quarter of 2024
  • First quarter software operations bookings included 22 six-figure customer contracts, up both on a sequential and prior year basis
  • Software backlog totaled $63.2 million at March 31, 2025, up more than 15% from the prior year, as we continue to focus on Multi-Year and Managed Services bookings
  • First quarter 2025 Wireless average revenue per unit (ARPU) was $24, up more than 4% on a year-over-year basis
  • Capital returned to stockholders in the first quarter of 2025 totaled $7.9 million
  • Research and development costs totaled $3.1 million in the first quarter of 2025, supporting Spok’s investment in the Company’s industry-leading solutions to fuel future growth
  • Cash and cash equivalents balance of $19.9 million at March 31, 2025, and no debt

“I am proud of the strong performance our team was able to deliver in the first quarter and believe these results provide solid momentum as we kick-off 2025,” said Vincent D. Kelly, chief executive officer of Spok Holdings, Inc. “Spok continues to execute on generating cash flow and returning capital to stockholders, while responsibly investing for future growth. In the first quarter, we made tremendous progress in several key performance areas, including software revenue growth, wireless ARPU 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 nearly 6% from our very strong performance in the first quarter of 2024. In fact, the $8.3 million of software operations bookings in the first quarter of 2025, combined with a strong backlog, drove a more than 44% increase in professional services revenue and 4% growth in total revenue on a year-over-year basis.

“Spok continues its proud legacy of balancing the necessary investments in our products and infrastructure with returning capital to our stockholders,” continued Kelly. “In the first quarter, we generated nearly $5.2 million of net income and over $8.2 million of adjusted EBITDA, while continuing to invest in the development of our products at a rate aligned with 2024. Consistent with prior years, our cash balances declined in the first quarter because of typical working capital needs. However, we anticipate cash balances will generally grow through the remainder of the year, given that those needs are behind us.

“We were very pleased with our performance in the first quarter and believe that it provides a solid springboard for 2025. However, I’d like to address the current uncertainty in the macro environment around tariffs and its impact on the healthcare industry, and Spok in particular. Based on the current landscape, we believe that neither our revenue nor our supply chain will be materially impacted. Additionally, Spok’s products and solutions are viewed as an essential utility within the walls of our hospital customers. For those reasons, and coupled with our first quarter performance, we feel comfortable reiterating our financial guidance for the year. 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)20252024Change (%)
Revenue
Wireless revenue
Paging revenue$           17,607$           17,970(2.0) %
Product and other revenue                  867                  62538.7  %
Total wireless revenue$           18,474$           18,595(0.7) %
Software revenue
License               2,631               2,6260.2  %
Professional services – projects$             4,471$             3,56125.6  %
Professional services – managed services               1,315                  464183.4  %
Hardware                  321                  384(16.4) %
Maintenance               9,082               9,279(2.1) %
Total software revenue$           17,820$           16,3149.2  %
Total revenue$           36,294$           34,9094.0  %

For the three months ended March 31,

(Dollars in thousands)20252024Change (%)
GAAP
Operating expenses$           30,276$           30,0180.9  %
Net income$             5,196$             4,23622.7  %
Cash and cash equivalents (as of period end)$           19,873$           23,340(14.9) %
Capital returned to stockholders$             7,947$             7,3867.6  %
Non-GAAP
Adjusted operating expenses$           29,360$           28,5222.9  %
Adjusted EBITDA$             8,204$             7,5358.9  %

 

For the three months ended March 31,

(Dollars in thousands, excluding units in service and ARPU)20252024Change (%)
Key Statistics
Wireless units in service (000’s)                  705                  753(6.4) %
Wireless average revenue per unit (ARPU)$               8.24$               7.894.4  %
Software operations bookings(1)$             8,337$             7,8855.7  %
Software backlog (as of period end)(2)$           63,152$           54,67015.5  %

(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.

(2) Software backlog excludes $5.0 million and $3.3 million of contractual obligations that are deemed cancellable by the customer without significant penalty as of March 31, 2025 and 2024, respectively.

Financial Outlook:

Regarding financial guidance, the Company reiterated the following expectations for the full year 2025:

(Unaudited and in millions)

Current Guidance Full Year 2025

FromTo
Revenue
Wireless$                             69.0$                             72.0
Software$                             65.0$                             70.0
Total Revenue$                           134.0  $                           142.0 
Adjusted EBITDA$                             27.5  $                             32.5 

2025 First Quarter Call:

Management will host a conference call and webcast to discuss these financial results on Wednesday, April 30, 2025, 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, April 30, 2025, at 5:00 p.m. ET
Webcast:https://www.webcast-eqs.com/register/Spok_1Q_2025/en
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 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 and accretion expense, stock-based compensation expense, impairment of intangible assets and severance and restructuring. With respect to our expectations under “Financial Outlook” 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

SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands except share, per share amounts and ARPU)

For the three months ended

3/31/20253/31/2024
Revenue:
Wireless$          18,474$          18,595
Software            17,820            16,314
Total revenue            36,294                 34,909    
Operating expenses:
Cost of revenue (exclusive of items shown separately below)              7,212              7,139
Research and development              3,055              2,951
Technology operations              5,850              6,299
Selling and marketing              4,845              4,149
General and administrative              8,398              7,984
Depreciation and accretion                859              1,068
Severance and restructuring                  57                428
Total operating expenses            30,276                 30,018    
% of total revenue83.4  %86.0  %
Operating income              6,018                  4,891   
% of total revenue16.6  %14.0  %
Interest income                219                254
Other income (expense)                  22                  (2)
Income before income taxes              6,259                  5,143   
Provision for income taxes            (1,063)               (907)
Net income$            5,196    $            4,236   
Basic and diluted net income per common share$              0.25$              0.21
Basic weighted average common shares outstanding     20,440,306     20,170,548
Diluted weighted average common shares outstanding     20,656,794     20,446,587
Cash dividends declared per common share            0.3125            0.3125

 

SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

3/31/2025

12/31/2024

ASSETS

(Unaudited)

Current assets:
Cash and cash equivalents$                           19,873$                           29,145
Accounts receivable, net                            20,672                            21,950
Prepaid expenses                              9,082                              9,362
Other current assets                                 778                                 840
Total current assets                            50,405                              61,297 
Non-current assets:
Property and equipment, net                              5,869                              5,952
Operating lease right-of-use assets                              7,663                              8,249
Goodwill                            99,175                            99,175
Deferred income tax assets, net                            40,726                            41,686
Other non-current assets                                 638                                 744
Total non-current assets                           154,071                             155,806 
Total assets$                         204,476  $                         217,103 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$                             3,297$                             5,630
Accrued compensation and benefits                              3,126                              7,363
Deferred revenue                            26,961                            28,366
Operating lease liabilities                              2,799                              2,904
Other current liabilities                              4,584                              4,511
Total current liabilities                            40,767                              48,774 
Non-current liabilities:
Asset retirement obligations                              5,759                              5,945
Operating lease liabilities                              5,380                              5,869
Other non-current liabilities                                 832                              1,769
Total non-current liabilities                            11,971                              13,583 
Total liabilities                            52,738                              62,357 
Commitments and contingencies
Stockholders’ equity:
Preferred stock$                                  —$                                  —
Common stock                                     2                                     2
Additional paid-in capital                           104,163                           105,736
Accumulated other comprehensive  loss                             (1,774)                             (1,784)
Retained earnings                            49,347                            50,792
Total stockholders’ equity                           151,738                             154,746 
Total liabilities and stockholders’ equity$                         204,476  $                         217,103 
SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)

For the three months ended

3/31/2025

3/31/2024

Operating activities:
Net income

$                             5,196

$                             4,236

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and accretion

                                 859

                              1,068

Deferred income tax expense

                                 962

                                 902

Stock-based compensation

                              1,270

                              1,148

Provisions for credit losses, service credits and other

                                 220

                                 272

Changes in assets and liabilities:
Accounts receivable

                              1,050

                              1,318

Prepaid expenses and other assets

                                 446

                                 779

Net operating lease liabilities

                                   (8)

                                   41

Accounts payable and other liabilities

                             (6,160)

                             (6,405)

Deferred revenue

                             (1,582)

                             (1,361)

Net cash provided by operating activities

                              2,253

                              1,998

Investing activities:
Purchases of property and equipment

                                (745)

                                (875)

Net cash used in investing activities

                                (745)

                                (875)

Financing activities:
Cash distributions to stockholders

                             (7,947)

                             (7,386)

Purchase of common stock for tax withholding on vested equity awards

                             (2,843)

                             (2,428)

Net cash used in financing activities

                           (10,790)

                             (9,814)

Effect of exchange rate on cash and cash equivalents

                                   10

                                   42

Net decrease in cash and cash equivalents

                             (9,272)

                             (8,649)

Cash and cash equivalents, beginning of period

                            29,145

                            31,989

Cash and cash equivalents, end of period

$                           19,873 

$                           23,340 

Supplemental disclosure:
Income taxes paid (refunded)

$                                 (4)

$                                   5

SPOK HOLDINGS, INC.
UNITS IN SERVICE, MARKET SEGMENTS,
AND AVERAGE REVENUE PER UNIT (ARPU)
(Unaudited and in thousands)

For the three months ended

3/31/202512/31/20249/30/20246/30/20243/31/202412/31/20239/30/20236/30/2023
Account size ending units in service (000’s)
1 to 100 units           39           40           41           42           43           44           46           48
101 to 1,000 units         121         120         125         128         135         142         143         144
>1,000 units         545         560         564         577         575         579         596         614
Total         705             720             730             747             753             765             785             806   
Market segment as a percent of total ending units in service
Healthcare85.5  %85.6  %85.7  %85.8  %86.1  %85.9  %86.0  %86.1  %
Government4.0 %4.0 %4.1 %4.4 %4.1 %4.2 %4.2 %4.2 %
Large enterprise3.8 %3.9 %4.0 %4.0 %3.9 %4.1 %4.1 %4.0 %
Other(1)6.7 %6.5 %6.2 %5.8 %5.9 %5.8 %5.7 %5.7 %
Total 100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  % 100.0  %
Account size ARPU
1 to 100 units$    13.04$    13.08$    12.70$    12.51$    12.66$    12.57$    12.02$    11.91
101 to 1,000 units        9.64        9.60        9.19        9.06        9.14        9.16        8.75        8.56
>1,000 units        7.59        7.50        7.33        7.21        7.23        7.15        6.97        6.94
Total$      8.24    $      8.16    $      7.95    $      7.84    $      7.89    $      7.84    $      7.59    $      7.53   
(1) Other includes hospitality, resort and indirect units
RECONCILIATION OF ADJUSTED OPERATING EXPENSES
(Unaudited and in thousands)

For the three months ended

3/31/2025

3/31/2024

Operating expenses

$                  30,276 

$                  30,018 

Add back:
Depreciation and accretion

                       (859)

                    (1,068)

Severance and restructuring

                         (57)

                       (428)

Adjusted operating expenses

$                  29,360 

$                  28,522 

RECONCILIATION OF ADJUSTED EBITDA
(Unaudited and in thousands)

For the three months ended

3/31/2025

3/31/2024

Net income

$                    5,196

$                    4,236

Add back:
Provision for income taxes

                      1,063

                        907

Other income (expense)

                         (22)

                            2

Interest income

                       (219)

                       (254)

Depreciation and accretion

                        859

                      1,068

EBITDA

$                    6,877

$                    5,959

Adjustments:
Stock-based compensation

                      1,270

                      1,148

Severance and restructuring

                          57

                        428

Adjusted EBITDA

$                    8,204

$                    7,535