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]

Financial Data and Key Metrics Changes - In Q1 2025, total GAAP revenue was $36.3 million, up more than 7% from $33.9 million in the prior quarter and nearly 4% from $34.9 million in Q1 2024 [24] - GAAP net income totaled $5.2 million or $0.25 per diluted share, an increase from $4.2 million or $0.21 per diluted share in 2024 [23] - Adjusted EBITDA reached $8.2 million, reflecting a nearly 9% increase from the same quarter in 2024 [29] Business Line Data and Key Metrics Changes - Software revenue was $17.8 million, up 9.2% from the prior year quarter, while wireless revenue was $18.5 million, nearly flat compared to Q1 2024 [24] - Professional services revenue increased by nearly 44% year over year, totaling $5.8 million, with managed services revenue accounting for $1.3 million, up more than 180% from $500,000 in Q1 2024 [27] - Software backlog increased by more than 15% year over year, indicating strong future revenue potential [9] Market Data and Key Metrics Changes - The average revenue per unit (ARPU) for wireless services increased by 4.4% year over year to $824, driven by prior pricing actions and sales of new products [24] - Net unit churn improved to 6.4% from 7.2% in the prior year, reflecting better customer retention [24] Company Strategy and Development Direction - The company aims to generate cash and return capital to shareholders while investing in growth, maintaining a disciplined expense management approach [5][12] - The strategic focus includes continued investment in wireless and software solutions, growing the revenue base, and a stockholder-friendly capital allocation plan [12] - The company has transformed into a leading healthcare communications provider, emphasizing its commitment to enhancing patient care and safety through technology [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite macroeconomic uncertainties, reiterating guidance for 2025 [16][31] - The company anticipates annual free cash flow in the range of $24 to $28 million and expects to exit 2025 with cash balances between $23 million and $27 million [30] - Management highlighted a strong start to 2025, with expectations for continued growth driven by software solutions and a solid customer base [33] Other Important Information - The company has maintained a strong reputation in the healthcare communications industry, recognized as a top clinical communications platform for eight of the past ten years [15] - The HIMSS conference experience was positive, with a focus on prequalifying meetings leading to better engagement and interest in new products [48][50] Q&A Session Summary Question: Is there any seasonality with the larger 7 figure contracts? - Management noted no seasonality observed, with a positive trend in contract signings [38] Question: What drove the strong wireless product revenue? - The increase was primarily due to a pricing initiative for unreturned pagers, expected to yield an annualized benefit of about $1 million [40] Question: What drove the improvement in gross margin? - Gross margin improved due to strong revenue performance, though fluctuations may occur based on quarterly results [41][42] Question: What is the conversion timeline for the software backlog? - Approximately half of the backlog is services, with maintenance revenue typically recognized over a year and services over nine to fifteen months [43][44] Question: How was the experience at the HIMSS conference? - The conference was better than the previous year, with a focused approach leading to successful customer engagements [48][50] Question: What is the strategy for managed services? - Managed services provide fixed costs for customers, aiding in revenue recognition and reducing churn [52][53] Question: Are the new logos significant customers? - Both new logos are meaningful wins, with the company having pursued them for some time [56][59]

Financial Data and Key Metrics Changes - In Q1 2025, GAAP net income was $5.2 million or $0.25 per diluted share, up from $4.2 million or $0.21 per diluted share in Q1 2024 [22] - Total GAAP revenue for Q1 2025 was $36.3 million, an increase of over 7% from $33.9 million in the prior quarter and nearly 4% from $34.9 million in Q1 2024 [23] - Adjusted EBITDA totaled $8.2 million, reflecting a nearly 9% increase from the same quarter in 2024 [28] Business Line Data and Key Metrics Changes - Software revenue reached $17.8 million, up 9.2% from the prior year quarter, while wireless revenue was $18.5 million, nearly flat compared to Q1 2024 [23] - Professional services revenue was $5.8 million, up nearly 44% from $4 million in Q1 2024, with managed services revenue totaling $1.3 million, representing over 22% of total professional services revenue [26] - Software backlog increased by more than 15% year over year, indicating strong future revenue potential [42] Market Data and Key Metrics Changes - The company maintains the largest paging network in the United States, serving over 2,200 hospitals [12] - Wireless average revenue per unit (ARPU) increased by 4.4% year over year to $824, driven by pricing actions and sales of new products [23] Company Strategy and Development Direction - The company aims to generate cash and return capital to shareholders while investing in business growth, focusing on four strategic tenets: investment in wireless and software solutions, revenue growth, disciplined expense management, and stockholder-friendly capital allocation [10][9] - The company is committed to maintaining a strong position in healthcare communications, leveraging its established solutions and customer base to create shareholder value [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance and reiterated guidance for 2025, expecting total revenue to range from $134 million to $142 million [31] - The company believes that current macroeconomic uncertainties will not materially impact revenue or supply chain, maintaining a positive outlook for the healthcare industry [14] Other Important Information - The company plans to invest between $11 million and $12 million in product research and development in 2025 to fuel future software revenue growth [9] - The company has returned over $700 million to shareholders over the past 20 years through dividends and share repurchases [9] Q&A Session Summary Question: Is there any seasonality with the larger 7-figure contracts? - Management noted no seasonality observed, with a positive trend in contract signings [36][37] Question: What drove the strong wireless product revenue? - The increase was primarily due to a price increase for unreturned pagers, expected to yield an annualized benefit of about $1 million [38][39] Question: What drove the improvement in gross margin? - Gross margin improved due to strong revenue performance, but fluctuations are expected based on revenue dynamics [40][41] Question: What is the conversion timeline for the software backlog? - Approximately half of the backlog is services, which typically convert over a 9 to 15-month period [42][43] Question: What was the experience at the HIMSS conference? - The conference was better than the previous year, with a focused approach leading to successful customer engagements [48][49] Question: What is the strategy for professional services? - The focus is on managed services, providing fixed costs for customers and improving revenue recognition [51][52] Question: Are the two new logos significant customers? - Both new customers are meaningful wins that the company has pursued for some time [58][60]

Financial Data and Key Metrics Changes - In 2024, GAAP net income totaled $15 million or $0.73 per diluted share, compared to $15.7 million or $0.77 per diluted share in 2023 [45][29] - Total GAAP revenues were $137.7 million, down from $139 million in 2023, with wireless revenue at $73.5 million, down from $76 million [45][46] - Software revenue increased to $64.1 million in 2024, driven by a nearly 22% increase in professional services revenue [46][51] - Adjusted EBITDA was $29.2 million in 2024, down from $30.3 million in 2023, reflecting lower consolidated revenue but maintaining a healthy margin of over 21% [56] Business Line Data and Key Metrics Changes - Software operations bookings totaled $34.1 million, up more than 13% from the prior year, with significant growth in professional services and maintenance backlog levels exceeding $62 million [30][31] - Professional services revenue reached $17.9 million, up 21.6% from $14.7 million in 2023, indicating improved resource utilization and higher margins [51][52] - Managed services revenue totaled $3.3 million, representing 18.2% of professional services revenue, up from 1.4 million or less than 10% in 2023 [53] Market Data and Key Metrics Changes - The company reported a reduction in net unit churn, with a decline of approximately 5.9% in 2024 compared to a 6.4% decline in 2023 [47] - Wireless revenue performance was primarily driven by an improvement in average revenue per unit (ARPU), which increased by $0.26 year-over-year [46] Company Strategy and Development Direction - The strategic focus remains on growing software revenue, generating cash, and returning capital to stockholders, with a commitment to maintaining a disciplined expense management approach [8][24] - The company aims to enhance its product offerings, particularly through the Spok Care Connect suite, and has invested significantly in research and development [15][19] - The company has a strong recurring revenue model, with approximately 80% of revenue coming from recurring sources, including wireless services and software maintenance [96][97] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute in 2025, with expectations for revenue and adjusted EBITDA to remain stable or grow slightly [58][59] - The company anticipates continued demand for its wireless services, despite a secular decline in pager units, and is focused on pricing strategies to offset revenue loss [48][49] - Management highlighted the importance of ongoing product development and customer satisfaction as key drivers for future growth [110][125] Other Important Information - The company returned $26.4 million in cash to stockholders in 2024, continuing its legacy of returning capital since becoming public [8][25] - The company has generated over $1 billion in free cash flow since its inception in 2004, supporting its dividend policy and capital allocation strategy [26] Q&A Session Summary Question: Key attributes of software operations bookings growth - Management indicated that growth was driven by a mix of new contracts, renewals from existing customers, and enhancements to the Care Connect suite [67][70] Question: Contributors to EBITDA guidance - The increase in EBITDA is expected to come from a greater mix of software sales and improved efficiency in professional services [76][78] Question: Reason for headquarters relocation - The relocation to Plano was primarily a cost-saving measure, consolidating operations to improve efficiency [87][89] Question: Recurring revenue metrics - Approximately 80% of bookings come from existing customers, with a significant portion of revenue being recurring [93][96] Question: Product roadmap and timelines - Management provided insights into ongoing product updates and enhancements, which are expected to drive future license sales [107][110]