Spok Holdings (SPOK) Q2 Earnings and Revenues Decline Y/Y

Core Insights - Spok Holdings, Inc. reported a decline in both top-line and bottom-line results for the second quarter of 2024, with total revenues of $33.9 million, down 6.8% year over year [4][25] - The company experienced a decrease in earnings per share (EPS) to 17 cents, a 26.1% decline from the previous year's 23 cents [3][25] - The gross profit fell by 9.8% to $26.8 million, with a gross margin contraction of 263 basis points to 78.9% [8][25] Revenue Breakdown - Wireless revenues were $18.3 million, down 3.1% year over year, primarily due to a decline in Paging revenues [1][25] - Software segment revenues totaled $15.7 million, down 10.8% year over year, mainly due to lower revenues from License and Hardware [2][25] - Paging revenues were $17.6 million, down 3.5% year over year, while Product and other revenues increased by 9.6% to $0.7 million [7][25] Profitability Metrics - Adjusted operating profit decreased by 14% to $12.1 million, with an adjusted operating margin contraction of 299 basis points to 35.5% [10][25] - Net income for the quarter was $3.4 million, down 27.6% from the year-ago quarter [17][25] - Adjusted EBITDA was $7 million, reflecting a 17.2% decline year over year [18][25] Expense Analysis - Total adjusted operating expenses decreased by 6% to $14.7 million, with selling and marketing expenses down 19.5% to $3.5 million [9][25] - Research and development expenses increased by 11.3% to $3.2 million, while general and administrative expenses declined by 4.9% to $8.1 million [9][25] Guidance and Future Outlook - The company reiterated its full-year guidance, projecting Wireless revenues between $72 million and $75 million and Software revenues between $64 million and $69 million [12][11] - Adjusted EBITDA for 2024 is expected to range from $27.5 million to $32.5 million [13][11] - Total revenues for 2024 are projected to be between $136 million and $144 million [24][11] Positive Indicators - An increase in Wireless average revenue per unit (ARPU) to $7.84, up 4.1% year over year [14][22] - Software backlog totaled $55 million, up 3.6% from the prior-year quarter [15][22]