Spok(US:SPOK)2024-07-25 20:02Revenue Performance - Wireless revenue for Q2 2024 was $18,297,000, a decrease of 3.1% from $18,877,000 in Q2 2023[142] - Software revenue for Q2 2024 was $15,685,000, down 10.8% from $17,586,000 in Q2 2023[142] - Total revenue for Q2 2024 was $33,982,000, a decline of 6.8% compared to $36,463,000 in Q2 2023[142] - Total software revenue decreased by 10.8% to $15.685 million for the three months ended June 30, 2024, compared to $17.586 million in the same period of 2023[201] - Wireless revenue decreased by 3.1% to $18.297 million for the three months ended June 30, 2024, compared to $18.877 million in the same period of 2023[197] - Maintenance revenue increased by 2.7% to $9.368 million for the three months ended June 30, 2024, compared to $9.124 million in the same period of 2023[201] Income and Expenses - Operating income for Q2 2024 was $4,474,000, representing a decrease of 28.0% from $6,215,000 in Q2 2023[142] - Net income for Q2 2024 was $3,425,000, down 27.6% from $4,733,000 in Q2 2023[142] - Total operating expenses for Q2 2024 were $29,508,000, a decrease of 2.4% from $30,248,000 in Q2 2023[142] - Research and development expenses increased by 11.3% to $3,176,000 in Q2 2024 from $2,853,000 in Q2 2023[142] - Selling and marketing expenses decreased by $848,000 (19.5%) for the three months ended June 30, 2024, primarily due to a significant drop in commissions[220] - General and administrative expenses for the three months ended June 30, 2024, decreased by $422,000 (5.0%) compared to the same period in 2023, driven by reductions in facility rent and office costs[217] Cash Flow and Liquidity - As of June 30, 2024, the company held cash and cash equivalents of $23.9 million, which will be used for working capital, operations, and potential investments[224] - The company anticipates that net cash from operating activities and available cash on hand will be adequate to meet cash requirements for both the short term and long term[232] - For the six months ended June 30, 2024, net cash provided by operating activities was $9.4 million, a decrease of $1.8 million compared to $11.2 million for the same period in 2023[239] - Net cash used in financing activities was $16.0 million, compared to $14.3 million for the same period in 2023, indicating an increase of about 11.9%[163] Assets and Liabilities - Total assets decreased from $227,684 thousand as of December 31, 2023, to $216,377 thousand as of June 30, 2024, representing a decline of approximately 5.7%[157] - Current liabilities decreased from $48,008 thousand to $43,356 thousand, a reduction of about 9.3%[157] - Total stockholders' equity decreased from $163,771 thousand to $158,212 thousand, reflecting a decrease of approximately 3.4%[157] Operational Insights - Active transmitters decreased by 5.4% to 3,101 in Q2 2024 from 3,278 in Q2 2023[142] - The number of wireless units in service declined from 806 thousand as of June 30, 2023, to 747 thousand as of June 30, 2024[198] - The company anticipates continued decline in demand for wireless services due to competition from broadband technology[203] - The GenA pager is the only product on the market with advanced capabilities, expected to provide a competitive advantage and slow wireless revenue attrition[193] Dividends and Shareholder Returns - The company declared a quarterly cash dividend of $0.3125 per share, totaling approximately $6.3 million to be paid from available cash[150] - A quarterly cash dividend of $0.3125 per share was declared, amounting to approximately $6.3 million, to be paid from available cash on hand[164] Research and Development - Research and development expenses increased due to higher outside services aimed at enhancing software solutions[208] - The company continues to enhance existing software solutions, which is expected to generate additional revenues for license sales and help reduce gross churn levels[166] Other Financial Metrics - The provision for income taxes decreased to $1.4 million for the three months ended June 30, 2024, down from $1.7 million in the same period in 2023[230] - Stock-based compensation increased by $147,000 (20.9%) for the three months ended June 30, 2024, compared to the same period in 2023, due to rising employee compensation costs[217] - The company incurred severance and restructuring expenses of $0.3 million and $0.8 million for the three and six months ended June 30, 2024, respectively, related to lease terminations[223] Strategic Outlook - The company anticipates continued positive cash flow generation in future operating periods following the successful completion of its restructuring plan[226] - The company continues to review its office and transmitter locations to potentially reduce or consolidate leases[247] - There were no changes to the critical accounting policies reported in the 2023 Annual Report that affect significant judgments and estimates[249] - The company does not have relationships with unconsolidated entities or financial partnerships, mitigating exposure to financing, liquidity, market, or credit risk[237]