Spok(SPOK) - 2024 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2024, GAAP net income was $4.2 million or$ 0.21 per diluted share, compared to $3.1 million or$ 0.15 per diluted share in Q1 2023 [7] - Total GAAP revenue for Q1 2024 was $34.9 million, up from$ 34 million in the prior quarter and $33.2 million in Q1 2023, reflecting a year-over-year growth of over 5% [11][38] - Adjusted EBITDA for Q1 2024 totaled$ 7.5 million, a 9.2% increase from the same quarter in 2023 [36] Business Line Data and Key Metrics Changes - Wireless revenue was $18.6 million, down 2.3% from the prior year, while software revenue was$ 16.3 million, up 15.3% from last year [7] - Maintenance revenue increased to $9.3 million, up approximately 3.8% year-over-year, while professional services revenue rose to$ 4 million from $3.2 million in Q1 2023 [32][33] - License and hardware revenue totaled$ 3 million, up from $2 million in the same period of 2023, driven by strong software operations bookings [35] Market Data and Key Metrics Changes - The company serves over 2,200 healthcare facilities, with over 80% of revenue being recurring in nature [2] - The first quarter saw a 39% year-over-year increase in software operations bookings, marking the second highest first quarter bookings level in the company's history [11][50] Company Strategy and Development Direction - The company aims to balance returning cash to shareholders while investing in product development and infrastructure [66][67] - Focus areas include continued investment in wireless and software solutions, disciplined expense management, and a shareholder-friendly capital allocation plan [68] - The company is optimistic about future growth driven by its established communication solutions and a strong customer base [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining momentum for the remainder of the year, citing a strong start in Q1 and positive trends in sales [10][23] - The company expects total revenue for 2024 to range from$ 136 million to $144 million, with adjusted EBITDA projected between$ 27.5 million and $32.5 million [38] Other Important Information - The company generated over$ 1 billion in free cash flow since inception, emphasizing a focus on maximizing cash over the long term [12] - The company received top honors for customer satisfaction in 12 of 18 key performance indicators in a survey by Black Book Research [13][62] Q&A Session Summary Question: Software bookings growth and full-year outlook - Management confirmed expectations for double-digit growth in software bookings for the full year, following a 39% growth in Q1 [45][46] Question: Churn expectations for the full year - Management indicated that they expect churn to remain in the 4% to 5% range on an annualized basis, consistent with previous statements [47] Question: Pipeline and large deals - Management noted that while Q1 did not include any large deals, the presence of multiple six-figure contracts indicates a solid pipeline for the future [55][25]