PLANO, Texas--(BUSINESS WIRE)--Spok, Inc., a wholly owned subsidiary of Spok Holdings, Inc. (NASDAQ: SPOK) and a global leader in healthcare communications, is privileged to recognize that nine of the 10 children's hospitals named to the 2025-2026 U.S. News & World Report Best Children's Hospitals Honor Roll rely on Spok industry-leading secure healthcare communication solutions to support care collaboration and deliver outstanding patient experiences. For over a decade, nearly every hospit. ...

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps investors identify stocks with momentum by focusing on key metrics [2] Group 2: Spok Holdings (SPOK) Analysis - Spok Holdings currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy), indicating potential for outperformance [3][4] - Over the past week, SPOK shares increased by 5.95%, while the Zacks Wireless National industry declined by 0.53% [6] - In the last quarter, SPOK shares rose by 14.34%, and over the past year, they gained 30.75%, outperforming the S&P 500's increases of 11.71% and 19.86% respectively [7] - The average 20-day trading volume for SPOK is 116,850 shares, which serves as a bullish indicator when combined with rising stock prices [8] Group 3: Earnings Outlook - In the past two months, one earnings estimate for SPOK increased, raising the consensus estimate from $0.82 to $0.86 [10] - For the next fiscal year, one estimate has also moved upwards, with no downward revisions during the same period [10] Group 4: Conclusion - Considering the positive momentum indicators and earnings outlook, SPOK is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a potential candidate for near-term investment [12]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying the right ones involves significant risk and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - Spok Holdings (SPOK) is currently recommended due to its favorable Growth Score and top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for attracting investor attention, with double-digit growth being particularly favorable [3] - Spok's historical EPS growth rate is 363%, with a projected EPS growth of 17.8% this year, surpassing the industry average of 16.6% [4] Group 3: Asset Utilization - The asset utilization ratio, or sales-to-total-assets (S/TA) ratio, is an important metric for growth stocks, indicating efficiency in generating sales [5] - Spok's S/TA ratio is 0.66, significantly higher than the industry average of 0.35, indicating better asset utilization [5] Group 4: Sales Growth - Sales growth is another critical factor, with Spok expected to achieve a sales growth of 3.4% this year, compared to the industry average of 0% [6] Group 5: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with stock price movements [7] - The current-year earnings estimates for Spok have increased by 4.9% over the past month, indicating positive momentum [8] Group 6: Overall Positioning - Spok has earned a Growth Score of B and a Zacks Rank 2 due to positive earnings estimate revisions, positioning it well for potential outperformance [10]

Core Viewpoint - Spok Holdings (SPOK) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for Spok suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7][9]. - Spok's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [10]. Earnings Estimate Revisions for Spok - For the fiscal year ending December 2025, Spok is expected to earn $0.86 per share, with no year-over-year change anticipated [8]. - Over the past three months, the Zacks Consensus Estimate for Spok has increased by 4.9%, reflecting analysts' positive revisions [8].

Core Viewpoint - The article emphasizes the importance of identifying sustainable trends in short-term investing to maximize profitability, highlighting the challenges investors face in maintaining momentum in stock prices [1][2]. Group 1: Stock Performance - Spok Holdings (SPOK) has shown a solid price increase of 10.9% over the past 12 weeks, indicating investor confidence in its potential upside [4]. - The stock has also maintained a price increase of 2.9% over the last four weeks, suggesting that the upward trend is still intact [5]. - SPOK is currently trading at 83.2% of its 52-week high-low range, indicating a potential breakout opportunity [5]. Group 2: Fundamental Strength - SPOK holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, which are critical for near-term price movements [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks with sufficient fundamental strength to sustain their recent uptrends, including SPOK [3]. - The article suggests that investors may explore other stocks that meet the criteria of the "Recent Price Strength" screen for potential investment opportunities [8].

Core Insights - Spok reported Q2 2025 GAAP revenue of $35.7 million, exceeding Wall Street expectations of $35.0 million, with diluted EPS at $0.22, above the $0.18 estimate, reflecting a positive business momentum [1][2][10] - The company raised its full-year guidance, indicating confidence in continued growth, particularly in the software segment [1][10] Financial Performance - Q2 2025 revenue increased by 5.0% year-over-year, driven mainly by the software segment, while operating expenses rose by 2.7% [5][6] - Net income for Q2 2025 was $4.6 million, a 35.3% increase from $3.4 million in Q2 2024 [2][5] - Adjusted EBITDA for Q2 2025 was reported at $7.5 million, up 7.1% from $7.0 million in Q2 2024 [2][5] Business Overview and Strategy - Spok focuses on healthcare communications software and wireless messaging, with its primary product, Spok Care Connect, enhancing clinical communications in hospitals [3][4] - The company is concentrating on growing its healthcare software segment while managing the decline in traditional wireless messaging [4] Segment Performance - Software revenue grew by 10.0% to $17.2 million, with bookings increasing by 34.1% to $11.7 million and a backlog of $65.2 million, up nearly 19% [6][10] - Wireless revenue remained stable at $18.4 million, with a slight decline in paging revenue by 2.5% and a 7.1% decrease in wireless units in service [7][8] Cash Generation and Returns - Spok ended the quarter with $20.2 million in cash and no debt, returning $6.5 million to shareholders, maintaining a quarterly dividend of $0.3125 per share [9][11] - Research and development spending was steady at $6.1 million for the first half of the year, supporting ongoing investments in software and wireless platforms [9] Management Outlook - Management raised full-year revenue guidance to $138.0–$143.5 million and adjusted EBITDA to $28.5–$32.5 million for 2025, anticipating software revenue growth while wireless revenue may remain flat or decline slightly [10][11]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents Spok Holdings, Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents Spok Holdings, Inc.'s unaudited condensed consolidated financial statements, including the balance sheets, statements of operations, comprehensive income, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, revenue recognition, leases, and other financial components for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents Spok Holdings, Inc.'s unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024 | (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Cash and cash equivalents | $20,242 | $29,145 | | Accounts receivable, net | $25,819 | $21,950 | | Total current assets | $56,475 | $61,297 | | Total assets | $208,670 | $217,103 | | Total current liabilities | $45,444 | $48,774 | | Total liabilities | $57,734 | $62,357 | | Total stockholders' equity | $150,936 | $154,746 | - Total assets decreased by **$8.43 million** from December 31, 2024, to June 30, 2025[9](index=9&type=chunk) - Total liabilities decreased by **$4.62 million** from December 31, 2024, to June 30, 2025[9](index=9&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents Spok Holdings, Inc.'s unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024 | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------- | :----------------------------- | :----------------------------- | :--------- | :----------------------------- | :----------------------------- | :--------- | | Total Revenue | $35,686 | $33,982 | 5.0% | $71,980 | $68,891 | 4.5% | | Operating Income | $5,392 | $4,474 | 20.5% | $11,410 | $9,365 | 21.8% | | Net Income | $4,552 | $3,425 | 32.9% | $9,748 | $7,661 | 27.2% | | Basic net income per common share | $0.22 | $0.17 | 29.4% | $0.48 | $0.38 | 26.3% | | Diluted net income per common share | $0.22 | $0.17 | 29.4% | $0.47 | $0.37 | 27.0% | | Cash dividends declared per common share | $0.3125 | $0.3125 | 0.0% | $0.6250 | $0.6250 | 0.0% | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents Spok Holdings, Inc.'s unaudited condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2025 and 2024 | (Unaudited and in thousands) | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2024 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Net income | $4,552 | $3,425 | $9,748 | $7,661 | | Foreign currency translation adjustments | $12 | $(48) | $22 | $(6) | | Comprehensive income | $4,564 | $3,377 | $9,770 | $7,655 | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section presents Spok Holdings, Inc.'s unaudited condensed consolidated statements of stockholders' equity for the six months ended June 30, 2025 - Total stockholders' equity decreased from **$154.75 million** at January 1, 2025, to **$150.94 million** at June 30, 2025[15](index=15&type=chunk) - Net income contributed **$5.20 million** and **$4.55 million** for the first and second quarters of 2025, respectively[15](index=15&type=chunk) - Cash dividends declared totaled **$13.37 million** for the six months ended June 30, 2025[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents Spok Holdings, Inc.'s unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 | (Unaudited and in thousands) | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--------------------------- | :------------------------------------- | :------------------------------------- | | Net cash provided by operating activities | $9,290 | $9,420 | | Net cash used in investing activities | $(1,090) | $(1,516) | | Net cash used in financing activities | $(17,125) | $(16,012) | | Net decrease in cash and cash equivalents | $(8,903) | $(8,114) | | Cash and cash equivalents, end of period | $20,242 | $23,875 | - Investing activities in 2025 included **$0.70 million** in proceeds from the sale of a domain name[18](index=18&type=chunk) [Unaudited Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Unaudited%20Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to Spok Holdings, Inc.'s unaudited condensed consolidated financial statements, explaining significant accounting policies and financial components [NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=NOTE%201%20-%20ORGANIZATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines Spok's business as a healthcare communications leader and its significant accounting policies for financial statement preparation - Spok is a global leader in healthcare communications, providing wireless messaging services and enterprise-wide clinical communication solutions[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) - The financial statements are prepared in accordance with GAAP and SEC rules, with all significant intercompany accounts and transactions eliminated[24](index=24&type=chunk) [NOTE 2 - RISKS AND OTHER IMPORTANT FACTORS](index=11&type=section&id=NOTE%202%20-%20RISKS%20AND%20OTHER%20IMPORTANT%20FACTORS) This note refers to the detailed discussion of key operational and industry risks found in the company's Quarterly and Annual Reports - Key risks associated with operations and industry are detailed in 'Item 1A. Risk Factors' of this Quarterly Report and the 2024 Annual Report[30](index=30&type=chunk) [NOTE 3 - RECENT ACCOUNTING STANDARDS](index=11&type=section&id=NOTE%203%20-%20RECENT%20ACCOUNTING%20STANDARDS) This note discusses the expected adoption dates and potential impacts of recent accounting standards updates on the company's financial reporting - ASU 2023-09 (Income Taxes) is effective for fiscal years beginning after December 15, 2024, and Spok expects to adopt it for the year ending December 31, 2025[31](index=31&type=chunk) - ASU 2024-03 (Expense Disaggregation Disclosures) is effective for fiscal years beginning after December 15, 2026, and Spok is evaluating its impact[32](index=32&type=chunk) [NOTE 4 - SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%204%20-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note refers to the comprehensive details of the company's significant accounting policies as presented in its 2024 Annual Report - Significant accounting policies are detailed in Note 1, 'Organization and Significant Accounting Policies' of the 2024 Annual Report[33](index=33&type=chunk) [NOTE 5 - REVENUE, DEFERRED REVENUE AND PREPAID COMMISSIONS](index=11&type=section&id=NOTE%205%20-%20REVENUE,%20DEFERRED%20REVENUE%20AND%20PREPAID%20COMMISSIONS) This note provides a breakdown of revenue by type, details deferred revenue balances, and outlines remaining performance obligations | Revenue Type (Dollars in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Wireless revenue | $18,440 | $18,297 | $36,914 | $36,892 | | Software revenue | $17,246 | $15,685 | $35,066 | $31,999 | | Total revenue | $35,686 | $33,982 | $71,980 | $68,891 | - Deferred revenue balance at June 30, 2025, was **$29.46 million**, with **$18.9 million** recognized from the December 31, 2024, balance[43](index=43&type=chunk) - Remaining performance obligations at June 30, 2025, totaled **$65.2 million**, with approximately **$38.1 million** expected to be recognized in the next 12 months[45](index=45&type=chunk) [NOTE 6 - LEASES](index=13&type=section&id=NOTE%206%20-%20LEASES) This note details the company's lease costs, weighted average lease terms, discount rates, and future lease payment obligations | Lease Cost (Dollars in thousands) | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2024 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Operating lease cost | $738 | $1,015 | $1,502 | $2,050 | | Short-term lease cost | $1,918 | $2,449 | $3,933 | $4,901 | | Total lease cost | $2,656 | $3,464 | $5,435 | $6,951 | - Weighted average remaining lease term for operating leases was **4.00 years** at June 30, 2025, with a weighted average discount rate of **6.67%**[49](index=49&type=chunk) - Total future lease payments are **$8.85 million**, with **$1.45 million** due in the remaining six months of 2025[49](index=49&type=chunk) [NOTE 7 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS' COMPONENTS](index=14&type=section&id=NOTE%207%20-%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS'%20COMPONENTS) This note provides a breakdown of specific components within the condensed consolidated financial statements, including depreciation, accretion, and other income | (Dollars in thousands) | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2024 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--------------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Total depreciation | $831 | $892 | $1,668 | $1,786 | | Accretion | $23 | $175 | $45 | $349 | | Total depreciation and accretion expense | $854 | $1,067 | $1,713 | $2,135 | - Other income (expense) for the six months ended June 30, 2025, was **$0.76 million**, primarily due to a **$0.7 million** gain from the sale of a domain name[51](index=51&type=chunk) - Accounts receivable, net, was **$25.82 million** at June 30, 2025, including **$6.6 million** of unbilled receivables[52](index=52&type=chunk) [NOTE 8 - GOODWILL](index=15&type=section&id=NOTE%208%20-%20GOODWILL) This note discusses the qualitative assessment of goodwill for impairment and confirms no triggering events occurred during the period - A qualitative assessment of goodwill during the three months ended June 30, 2025, determined that no triggering event for impairment had occurred[55](index=55&type=chunk) [NOTE 9 - ASSET RETIREMENT OBLIGATIONS](index=15&type=section&id=NOTE%209%20-%20ASSET%20RETIREMENT%20OBLIGATIONS) This note details the company's asset retirement obligation liability, its changes, and future accretion estimates based on network activities - The total asset retirement obligation liability was **$6.33 million** at June 30, 2025, a decrease from **$6.49 million** at December 31, 2024[56](index=56&type=chunk) - The total estimated liability is expected to accrete to **$12.6 million** based on ongoing network rationalization activities and lease renewals[57](index=57&type=chunk) [NOTE 10 - STOCKHOLDERS' EQUITY](index=15&type=section&id=NOTE%2010%20-%20STOCKHOLDERS'%20EQUITY) This note provides details on common stock outstanding, cash dividends declared, and stock-based compensation expenses for the period - As of June 30, 2025, there were **20,583,854 shares** of common stock outstanding[58](index=58&type=chunk) - Cash dividends declared for the six months ended June 30, 2025, totaled **$13.37 million**, with quarterly dividends of **$0.3125 per share**[60](index=60&type=chunk) | Stock-Based Compensation Expense (Dollars in thousands) | For the Three Months Ended June 30, 2025 | For the Three Months Ended June 30, 2024 | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :------------------------------------------------------ | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Performance-based RSUs | $457 | $458 | $946 | $919 | | Time-based RSUs, DSUs and restricted stock | $742 | $679 | $1,498 | $1,346 | | ESPP | $24 | $22 | $49 | $42 | | Total stock-based compensation | $1,223 | $1,159 | $2,493 | $2,307 | [NOTE 11 - INCOME TAXES](index=19&type=section&id=NOTE%2011%20-%20INCOME%20TAXES) This note details changes in net deferred income tax assets, valuation allowances, and the company's evaluation of recent tax legislation - Net deferred income tax assets decreased to **$39.1 million** at June 30, 2025, from **$41.7 million** at December 31, 2024, with a valuation allowance of **$1.8 million**[82](index=82&type=chunk) - The company is evaluating the impact of the One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, on its financial statement disclosures[85](index=85&type=chunk) [NOTE 12 - COMMITMENTS AND CONTINGENCIES](index=19&type=section&id=NOTE%2012%20-%20COMMITMENTS%20AND%20CONTINGENCIES) This note confirms no material changes to the company's commitments and contingencies since the previous annual report - No material changes to commitments and contingencies were reported during the six months ended June 30, 2025, compared to the 2024 Annual Report[86](index=86&type=chunk) [NOTE 13 - RELATED PARTIES](index=19&type=section&id=NOTE%2013%20-%20RELATED%20PARTIES) This note discloses revenue and outstanding receivables from transactions with an entity where a Board member holds an executive position - Revenue from a related party (an entity where a Board member serves as EVP and CIO) was **$1.2 million** for the six months ended June 30, 2025, up from **$0.8 million** in 2024[87](index=87&type=chunk) - Outstanding receivables of **$0.5 million** from this related party at June 30, 2025, were settled in July 2025[87](index=87&type=chunk) [NOTE 14 - SEGMENT INFORMATION](index=20&type=section&id=NOTE%2014%20-%20SEGMENT%20INFORMATION) This note clarifies that Spok operates as a single segment, with performance evaluated based on consolidated net income by the Chief Executive Officer - Spok operates as a single operating segment: clinical communications and collaboration solutions, encompassing wireless and software solutions[90](index=90&type=chunk) - The Chief Executive Officer, as the Chief Operating Decision Maker (CODM), evaluates segment performance based on consolidated net income[91](index=91&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=20&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on Spok's financial performance and condition, highlighting revenue growth driven by software solutions, changes in operating expenses, and the company's liquidity and capital resources. It also discusses forward-looking statements and critical accounting policies [Overview](index=21&type=section&id=Overview) This section provides an overview of Spok's business, focusing on its clinical communication and collaboration solutions for healthcare - Spok delivers smart, reliable clinical communication and collaboration solutions primarily to the U.S. healthcare industry[98](index=98&type=chunk) - Solutions include call center applications, clinical alerting, secure messaging, paging services, mobile communications, and public safety response[98](index=98&type=chunk)[101](index=101&type=chunk) [Business](index=21&type=section&id=Business) This section refers to other reports for further details on Spok's business operations and strategic focus - Further details on Spok's business are available in Note 1 of this Quarterly Report and Item 1 of the 2024 Annual Report[99](index=99&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) This section analyzes Spok's financial performance, including revenue trends, operating expenses, other income, and income taxes | (Dollars in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :--------------------- | :----------------------------- | :----------------------------- | :--------- | :----------------------------- | :----------------------------- | :--------- | | Total revenue | $35,686 | $33,982 | 5.0% | $71,980 | $68,891 | 4.5% | | Operating income | $5,392 | $4,474 | 20.5% | $11,410 | $9,365 | 21.8% | | Net income | $4,552 | $3,425 | 32.9% | $9,748 | $7,661 | 27.2% | | FTE Employees | 419 | 398 | 5.3% | | | | | Active transmitters | 2,925 | 3,101 | (5.7)% | | | | [Revenue](index=22&type=section&id=Revenue) This section details revenue performance by type, including wireless and software, and discusses key metrics like units in service and ARPU | Revenue Type (Dollars in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :---------------------------------- | :----------------------------- | :----------------------------- | :--------- | :----------------------------- | :----------------------------- | :--------- | | Wireless revenue | $18,440 | $18,297 | 0.8% | $36,914 | $36,892 | 0.1% | | Software revenue | $17,246 | $15,685 | 10.0% | $35,066 | $31,999 | 9.6% | | Total revenue | $35,686 | $33,982 | 5.0% | $71,980 | $68,891 | 4.5% | - Wireless units in service decreased from **747 thousand units** at June 30, 2024, to **694 thousand units** at June 30, 2025[109](index=109&type=chunk) - Average Revenue Per User (ARPU) increased to **$8.20** for Q2 2025 (from $7.84 in Q2 2024) and **$8.21** for H1 2025 (from $7.85 in H1 2024) due to price increases[109](index=109&type=chunk) [Operating Expenses](index=24&type=section&id=Operating%20Expenses) This section analyzes changes in technology operations, selling and marketing, and general and administrative expenses - Technology operations expenses decreased by **4.6%** (three months) and **5.9%** (six months) due to a **5.7%** reduction in active transmitters from network rationalization efforts[117](index=117&type=chunk) - Selling and marketing expenses increased by **21.7%** (three months) and **19.0%** (six months) due to additional headcount, higher advertising/events, and commissions[118](index=118&type=chunk) - General and administrative expenses increased by **10.4%** (three months) and **7.8%** (six months) due to technology costs, bad debt, compensation, and compliance-related costs[119](index=119&type=chunk) [Other income (expense)](index=25&type=section&id=Other%20income%20(expense)) This section explains the components of other income and expense, highlighting significant non-operating gains or losses - Other income was **$0.7 million** (three months) and **$0.8 million** (six months) for 2025, primarily from a **$0.7 million** gain on the sale of a domain name[120](index=120&type=chunk) [Income taxes](index=25&type=section&id=Income%20taxes) This section discusses the provision for income taxes, including factors influencing changes in the effective tax rate - Provision for income taxes increased by **28.3%** (three months) and **24.0%** (six months) in 2025, driven by changes in the anticipated annual effective tax rate, permanent tax differences, and estimated R&D tax credits[121](index=121&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) This section examines Spok's cash position, sources and uses of cash, and its ability to meet short-term and long-term financial obligations - Cash and cash equivalents totaled **$20.2 million** as of June 30, 2025[123](index=123&type=chunk) - Net cash provided by operating activities was **$9.3 million** for the six months ended June 30, 2025, a slight decrease from **$9.4 million** in 2024[131](index=131&type=chunk) - The company anticipates that current operating cash flows and available cash will be adequate to meet both short-term and long-term cash requirements[128](index=128&type=chunk) [Cash and Cash Equivalents](index=26&type=section&id=Cash%20and%20Cash%20Equivalents) This section details the company's cash and cash equivalents balance and discusses associated risks related to uninsured deposits - Cash and cash equivalents were **$20.2 million** as of June 30, 2025[123](index=123&type=chunk) - A majority of deposits at financial institutions exceed insured limits, posing a risk in the event of institutional failure[123](index=123&type=chunk) [Cash Sources](index=26&type=section&id=Cash%20Sources) This section identifies the primary sources of liquidity, including operating cash flows and existing cash balances - Primary sources of liquidity are cash flows generated from operations and existing cash and cash equivalents[124](index=124&type=chunk) - The company aims to maintain **$5.0 million to $10.0 million** in operating accounts[124](index=124&type=chunk) [Cash Uses](index=26&type=section&id=Cash%20Uses) This section outlines the intended uses of cash, such as working capital, investments, dividends, and share repurchases - Cash is intended for working capital, operations, business investments, and returning value to stockholders through dividends and share repurchases[125](index=125&type=chunk) - A share repurchase program for up to **$10 million** of common stock was authorized in February 2022[126](index=126&type=chunk) [Cash Flows Overview](index=26&type=section&id=Cash%20Flows%20Overview) This section provides a summary of the company's cash flow adequacy for current and future requirements and potential mitigation strategies - Net cash provided by operating activities and available cash are anticipated to be adequate for short-term and long-term cash requirements[128](index=128&type=chunk) - Potential shortfalls may require reducing capital expenses, dividends, or share repurchases, or seeking additional financing[127](index=127&type=chunk) [Operating Activities](index=27&type=section&id=Operating%20Activities) This section analyzes net cash provided by operating activities, detailing the primary drivers of changes in cash from operations - Net cash provided by operating activities was **$9.3 million** for the six months ended June 30, 2025, a slight decrease from **$9.4 million** in 2024[131](index=131&type=chunk) - This was primarily due to increased cash received from customers, offset by cash payments for cost of revenues and operating expenses[131](index=131&type=chunk) [Investing Activities](index=27&type=section&id=Investing%20Activities) This section discusses net cash used in investing activities, including capital expenditures and proceeds from asset sales - Net cash used in investing activities decreased to **$1.1 million** for the six months ended June 30, 2025, from **$1.5 million** in 2024[132](index=132&type=chunk) - The decrease was due to proceeds from the sale of a domain name in 2025, partially offsetting purchases of property and equipment[132](index=132&type=chunk) [Financing Activities](index=27&type=section&id=Financing%20Activities) This section details net cash used in financing activities, primarily focusing on cash distributions to stockholders and equity award-related transactions - Net cash used in financing activities increased to **$17.1 million** for the six months ended June 30, 2025, from **$16.0 million** in 2024[133](index=133&type=chunk) - This was primarily due to cash distributions to stockholders and common stock purchases for tax withholding on vested equity awards[133](index=133&type=chunk) - A regular quarterly cash dividend of **$0.3125 per share** (**$6.4 million**) was declared on July 30, 2025[134](index=134&type=chunk) [Commitments and Contingencies](index=27&type=section&id=Commitments%20and%20Contingencies) This section presents a table of contractual obligations and discusses the company's approach to evaluating and provisioning for contingencies | (Dollars in thousands) | Total | 1 year or less | 1 to 3 years | 3 to 5 years | More than 5 years | | :--------------------- | :---- | :------------- | :----------- | :----------- | :---------------- | | Operating lease obligations | $9,386 | $3,269 | $3,906 | $1,400 | $811 | | Unconditional purchase obligations | $4,142 | $2,173 | $1,962 | $7 | — | | Total contractual obligations | $13,528 | $5,442 | $5,868 | $1,407 | $811 | - The company evaluates contingencies and establishes loss provisions for probable and estimable losses[139](index=139&type=chunk) [Related Party Transactions](index=28&type=section&id=Related%20Party%20Transactions) This section refers to specific notes for detailed disclosures regarding transactions with related parties - Refer to Note 13, 'Related Parties,' in the Notes to Condensed Consolidated Financial Statements for a discussion regarding related party transactions[141](index=141&type=chunk) [Critical Accounting Policies and Estimates](index=28&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the critical accounting policies and estimates that require significant management judgment in financial statement preparation - The preparation of financial statements requires management to make estimates and judgments, including those related to asset impairment, revenue recognition, and income taxes[142](index=142&type=chunk) - No material changes to critical accounting policies were reported since the 2024 Annual Report[143](index=143&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=28&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section addresses Spok's exposure to market risks, specifically interest rate risk and foreign currency exchange rate risk, concluding that the company has no material exposure to either as of June 30, 2025 [Interest Rate Risk](index=28&type=section&id=Interest%20Rate%20Risk) This section assesses Spok's exposure to interest rate fluctuations, concluding no material risk due to the absence of outstanding debt - As of June 30, 2025, Spok had no outstanding debt or revolving credit facility, resulting in no material exposure to interest rate risk[144](index=144&type=chunk) [Foreign Currency Exchange Rate Risk](index=28&type=section&id=Foreign%20Currency%20Exchange%20Rate%20Risk) This section evaluates Spok's exposure to foreign currency exchange rate fluctuations, determining it to be immaterial due to limited international business - Spok conducts a limited amount of business outside the United States, and the financial impact of foreign currency transactions is immaterial[145](index=145&type=chunk) - Consequently, the company does not have any material exposure to the risk of foreign currency exchange rate fluctuations[145](index=145&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=28&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of Spok's disclosure controls and procedures as of June 30, 2025, and reports no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=28&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms management's conclusion on the effectiveness of Spok's disclosure controls and procedures as of the reporting date - Management concluded that Spok's disclosure controls and procedures were effective as of June 30, 2025[146](index=146&type=chunk) [Changes in Internal Control over Financial Reporting](index=29&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes to the company's internal control over financial reporting during the most recent fiscal quarter - There were no material changes to the company's internal control over financial reporting during the three months ended June 30, 2025[147](index=147&type=chunk) [PART II. OTHER INFORMATION](index=29&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity sales, and controls [ITEM 1. LEGAL PROCEEDINGS](index=29&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 12, 'Commitments and Contingencies,' in the Notes to Condensed Consolidated Financial Statements for information regarding legal proceedings - Information regarding legal proceedings is provided in Note 12, 'Commitments and Contingencies,' of the Condensed Consolidated Financial Statements[148](index=148&type=chunk) [ITEM 1A. RISK FACTORS](index=29&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section states that the risk factors previously disclosed in the 2024 Annual Report have not materially changed during the six months ended June 30, 2025 - The risk factors included in 'Item 1A. Risk Factors' of Part I of the 2024 Annual Report have not materially changed during the six months ended June 30, 2025[149](index=149&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=29&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section reports that the company did not repurchase any shares of its common stock during the three months ended June 30, 2025 - The Company did not repurchase any shares of its common stock during the three months ended June 30, 2025[150](index=150&type=chunk) [ITEM 5. OTHER INFORMATION](index=29&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section provides other information, specifically noting that no directors or executive officers adopted or terminated securities trading plans during the quarter [Securities Trading Plans of Directors and Executive Officers](index=29&type=section&id=Securities%20Trading%20Plans%20of%20Directors%20and%20Executive%20Officers) This section reports on the adoption or termination of securities trading plans by directors and executive officers during the reporting period - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[151](index=151&type=chunk) [ITEM 6. EXHIBITS](index=30&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed or incorporated by reference as part of the report, including various certifications and Inline XBRL documents, noting that the financial information in XBRL documents is unaudited - Exhibits include certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[154](index=154&type=chunk) - The financial information contained in the XBRL documents is unaudited[154](index=154&type=chunk) [SIGNATURES](index=31&type=section&id=SIGNATURES) This section contains the official signatures certifying the accuracy and completeness of the report - The report was signed on July 31, 2025, by Calvin C. Rice, Chief Financial Officer of Spok Holdings, Inc[158](index=158&type=chunk)

Spok Holdings (SPOK) came out with quarterly earnings of $0.22 per share, beating the Zacks Consensus Estimate of $0.18 per share. This compares to earnings of $0.17 per share a year ago. These figures are adjusted for non-recurring items. There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations h ...

Financial Data and Key Metrics Changes - In Q2 2025, GAAP net income was $4,600,000 or $0.22 per diluted share, up from $3,400,000 or $0.17 per diluted share in Q2 2024 [25] - Total GAAP revenue increased to $35,700,000 from $34,000,000 in the prior year [26] - Adjusted EBITDA for Q2 2025 was $7,500,000 compared to $7,000,000 in the prior year [30] Business Line Data and Key Metrics Changes - Software operations bookings grew by over 34% year-over-year, reaching $11,700,000 in Q2 2025 [11] - Software revenue increased by 10%, with license revenue showing double-digit growth and managed services revenue experiencing triple-digit growth [11] - Wireless revenue was $18,400,000, with a net unit churn improvement to 1.6% from 2.1% in the prior quarter [26] Market Data and Key Metrics Changes - The company maintains a blue-chip customer base of over 2,200 hospitals, with more than 80% of revenue being recurring [20] - The average revenue per unit (ARPU) increased by $0.36 or nearly 5% year-over-year, driven by pricing actions and new product sales [26] Company Strategy and Development Direction - The company aims for double-digit full-year software bookings growth relative to 2024, supported by ongoing investments in technology and sales [5] - The strategic focus remains on generating cash and returning capital to stockholders while investing in business growth [7] - The company is exploring opportunities to integrate AI into its products and operating platform [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the competitive positioning and long-term relationships with healthcare systems [6] - The outlook for the remainder of 2025 is optimistic, with increased guidance for revenue and adjusted EBITDA [12] - The company anticipates annual free cash flow in the range of $25,000,000 to $29,000,000 [33] Other Important Information - The company reported a one-time gain of approximately $700,000 from the sale of a legacy domain name [31] - Cash and cash equivalents at the end of Q2 2025 were $20,200,000, expected to grow through the remainder of the year [32] Q&A Session Summary Question: Impact of increased fees for unreturned pagers on net unit churn - Management indicated that the price increase for unreturned equipment would not impact unit churn as it applies after disconnection [42][44] Question: Progress of the business development team focused on new logos - The business development team has been successful in adding smaller accounts, with ongoing efforts to build the pipeline [49][50] Question: Breakdown of software bookings between new customer acquisitions and expansions - Approximately 15% of software bookings were related to new logos, with ongoing efforts to increase this percentage [51][52]

Safe Harbor Statement Second Quarter 2025 Financial Highlights Statements contained herein or in prior press releases which are not historical fact, such as statements regarding our future operating and financial performance, are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that may cause our actual results to be materially different from the future results ex ...