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)

Group 1: Earnings Performance - Spok Holdings reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, and up from $0.17 per share a year ago, representing an earnings surprise of +22.22% [1] - The company posted revenues of $35.69 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.96%, compared to year-ago revenues of $33.98 million [2] - Over the last four quarters, Spok has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Spok shares have increased by approximately 6.4% since the beginning of the year, while the S&P 500 has gained 8.3% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at $0.19 for the coming quarter and $0.82 for the current fiscal year [4][7] - The current Zacks Rank for Spok is 3 (Hold), indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The Wireless National industry, to which Spok belongs, is currently in the bottom 27% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5]

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 ...

Executive Summary & Recent Highlights [**Q2 2025 Performance Overview**](index=1&type=section&id=Recent%20Highlights) Spok Holdings reported strong Q2 2025 results with significant year-over-year growth in net income and adjusted EBITDA, driven by robust software operations bookings and an increase in wireless ARPU. The company also declared a regular quarterly dividend and raised its full-year 2025 financial guidance - Net Income and Adjusted EBITDA for Q2 2025 increased by **33%** and **6%**, respectively, from the prior year period[3](index=3&type=chunk) - Software operations bookings totaled **$11.7 million** in Q2 2025, up **34%** from Q2 2024, including 23 six-figure and 1 seven-figure customer contracts[3](index=3&type=chunk) - Software backlog reached **$65.2 million** at June 30, 2025, an increase of nearly **19%** from the prior year[3](index=3&type=chunk) - Wireless average revenue per unit (ARPU) was **$8.20** in Q2 2025, up nearly **5%** year-over-year[3](index=3&type=chunk) - Capital returned to stockholders in Q2 2025 totaled **$6.5 million**[3](index=3&type=chunk) - Cash and cash equivalents balance was **$20.2 million** at June 30, 2025, with no debt[3](index=3&type=chunk) - A regular quarterly dividend of **$0.3125 per share** was declared, payable on September 9, 2025[1](index=1&type=chunk) [**CEO's Commentary**](index=1&type=section&id=CEO's%20Commentary) CEO Vincent D. Kelly highlighted the company's strong execution in generating cash flow, returning capital to stockholders, and investing for future growth. He emphasized significant progress in net income, cash generation, software revenue growth (especially managed services), wireless ARPU trends, and software bookings, leading to increased 2025 financial guidance - Spok continues to focus on generating cash flow and returning capital to stockholders while investing for future growth[4](index=4&type=chunk) - Software revenue increased by **10%** year-over-year in Q2 2025, driven by **double-digit growth** in license revenue and **triple-digit growth** in managed services revenue[4](index=4&type=chunk) - The company is increasing its full-year 2025 guidance estimates for revenue and adjusted EBITDA, anticipating consolidated revenue growth and **over 11% growth potential** for adjusted EBITDA at the high-end[6](index=6&type=chunk) Financial Performance [**Consolidated Revenue Breakdown**](index=3&type=section&id=Consolidated%20Revenue%20Breakdown) Total revenue for Q2 2025 increased by **5.0%** year-over-year, reaching **$35.686 million**, primarily driven by a **10.0%** increase in software revenue. Wireless revenue saw a slight increase of **0.8%**, with strong growth in product and other revenue offsetting a decline in paging Consolidated Revenue Breakdown (in thousands) | Revenue (in thousands) | Q2 2025 | Q2 2024 | Change (%) | H1 2025 | H1 2024 | Change (%) | | :--------------------- | :------ | :------ | :--------- | :------ | :------ | :--------- | | Wireless revenue | $18,440 | $18,297 | 0.8% | $36,914 | $36,892 | 0.1% | | Paging revenue | $17,192 | $17,633 | (2.5)% | $34,799 | $35,603 | (2.3)% | | Product and other revenue | $1,248 | $664 | 88.0% | $2,115 | $1,289 | 64.1% | | Software revenue | $17,246 | $15,685 | 10.0% | $35,066 | $31,999 | 9.6% | | License | $2,394 | $1,697 | 41.1% | $5,025 | $4,323 | 16.2% | | Professional services - projects | $3,831 | $3,682 | 4.0% | $8,302 | $7,243 | 14.6% | | Professional services - managed services | $1,520 | $604 | 151.7% | $2,835 | $1,068 | 165.4% | | Hardware | $376 | $334 | 12.6% | $697 | $718 | (2.9)% | | Maintenance and subscription | $9,125 | $9,368 | (2.6)% | $18,207 | $18,647 | (2.4)% | | **Total revenue** | **$35,686** | **$33,982** | **5.0%** | **$71,980** | **$68,891** | **4.5%** | [**Operating Expenses and Profitability**](index=3&type=section&id=Operating%20Expenses%20and%20Profitability) Operating expenses increased modestly, while net income and adjusted EBITDA showed strong year-over-year growth for both the second quarter and first half of 2025, reflecting improved profitability. Cash and cash equivalents decreased, but capital returned to stockholders increased Operating Expenses and Profitability (in thousands) | Financial Metric (in thousands) | Q2 2025 | Q2 2024 | Change (%) | H1 2025 | H1 2024 | Change (%) | | :------------------------------ | :------ | :------ | :--------- | :------ | :------ | :--------- | | Operating expenses (GAAP) | $30,294 | $29,508 | 2.7% | $60,570 | $59,526 | 1.8% | | Net income (GAAP) | $4,552 | $3,425 | 32.9% | $9,748 | $7,661 | 27.2% | | Cash and cash equivalents (period end) | $20,242 | $23,875 | (15.2)% | $20,242 | $23,875 | (15.2)% | | Capital returned to stockholders | $6,477 | $6,329 | 2.3% | $14,424 | $13,715 | 5.2% | | Adjusted operating expenses (Non-GAAP) | $29,420 | $28,093 | 4.7% | $58,780 | $56,615 | 3.8% | | Adjusted EBITDA (Non-GAAP) | $7,489 | $7,048 | 6.3% | $15,693 | $14,583 | 7.6% | [**Key Operational Statistics**](index=4&type=section&id=Key%20Statistics) Software operations bookings surged by **34.1%** in Q2 2025, contributing to an **18.5%** increase in software backlog. Wireless ARPU also grew by **4.6%**, despite a **7.1%** decline in wireless units in service Key Operational Statistics | Key Statistic | Q2 2025 | Q2 2024 | Change (%) | H1 2025 | H1 2024 | Change (%) | | :-------------------------- | :------ | :------ | :--------- | :------ | :------ | :--------- | | Wireless units in service (000's) | 694 | 747 | (7.1)% | 694 | 747 | (7.1)% | | Wireless average revenue per unit (ARPU) | $8.20 | $7.84 | 4.6% | $8.21 | $7.85 | 4.6% | | Software operations bookings | $11,661 | $8,695 | 34.1% | $19,998 | $16,580 | 20.6% | | Software backlog (period end) | $65,187 | $55,006 | 18.5% | $65,187 | $55,006 | 18.5% | Financial Outlook [**Updated 2025 Guidance**](index=4&type=section&id=Updated%202025%20Guidance) Spok increased its full-year 2025 financial guidance, raising the lower end of the total revenue range and maintaining the upper end, while also increasing the lower end of the Adjusted EBITDA guidance Revised Full Year 2025 Guidance (in millions) | (Unaudited and in millions) | Current Guidance Full Year 2025 | Prior Guidance Full Year 2025 | | :-------------------------- | :------------------------------ | :---------------------------- | | | From | To | From | To | | Revenue | | | | | | Wireless | $71.5 | $73.5 | $69.0 | $72.0 | | Software | $66.5 | $70.0 | $65.0 | $70.0 | | Total Revenue | $138.0 | $143.5 | $134.0 | $142.0 | | Adjusted EBITDA | $28.5 | $32.5 | $27.5 | $32.5 | Company Information [**2025 Second Quarter Call Details**](index=4&type=section&id=2025%20Second%20Quarter%20Call) Management will host a conference call and webcast on July 30, 2025, at 5:00 p.m. ET to discuss the financial results, with details provided for accessing the live event and an OnDemand version - A conference call and webcast to discuss financial results will be held on Wednesday, July 30, 2025, at 5:00 p.m. Eastern Time[13](index=13&type=chunk)[14](index=14&type=chunk) - Access details include a webcast link (https://www.webcast-eqs.com/register/Spok_2Q_2025/en) and U.S. toll-free (877-407-0890) and international (1-201-389-0918) dial-in numbers[14](index=14&type=chunk) [**About Spok**](index=5&type=section&id=About%20Spok) Spok Holdings, Inc., headquartered in Plano, Texas, is a global leader in healthcare communications. The company delivers clinical information to care teams through its Spok Care Connect® platform to improve patient outcomes and enhance workflows - Spok Holdings, Inc. is a global leader in healthcare communications, headquartered in Plano, Texas[16](index=16&type=chunk) - The company's core offering is the Spok Care Connect® platform, which enhances workflows for clinicians and supports administrative compliance to improve patient outcomes[16](index=16&type=chunk) - Customers send over 70 million messages each month through Spok® solutions[16](index=16&type=chunk) [**Non-GAAP Financial Measures**](index=5&type=section&id=Non-GAAP%20Financial%20Measures) This section defines non-GAAP financial measures such as adjusted operating expenses and adjusted EBITDA, explaining their exclusion criteria and rationale for use by management and investors. It also highlights the inherent limitations of these measures and advises against relying on them in isolation from GAAP results - Adjusted operating expenses exclude depreciation and accretion expense, impairment of intangible assets, and severance and restructuring costs[18](index=18&type=chunk) - Adjusted EBITDA represents net income/(loss) before interest income/expense, income tax benefit/expense, depreciation and accretion expense, stock-based compensation expense, impairment of intangible assets, and severance and restructuring[18](index=18&type=chunk) - These non-GAAP measures provide useful information for management and investors to evaluate core operating performance and trends, but they are not a substitute for GAAP measures and have inherent limitations[19](index=19&type=chunk)[21](index=21&type=chunk) [**Safe Harbor Statement**](index=7&type=section&id=Safe%20Harbor%20Statement%20under%20the%20Private%20Securities%20Litigation%20Reform%20Act) The Safe Harbor Statement clarifies that forward-looking statements involve risks and uncertainties that may cause actual results to differ materially. It lists various factors, including operational challenges, economic conditions, market competition, product defects, and cybersecurity threats - Statements regarding future operating and financial performance are forward-looking and subject to risks and uncertainties[22](index=22&type=chunk) - Key risk factors include managing wireless network rationalization, retaining key personnel, economic conditions (e.g., recession, inflation), competition from new technologies, declining paging units, and undetected product defects or security vulnerabilities[22](index=22&type=chunk)[24](index=24&type=chunk) - Other risks involve reliance on third-party IT systems, cyberattacks, data breaches, and regulatory changes affecting the healthcare industry[24](index=24&type=chunk) Financial Statements [**Condensed Consolidated Statements of Operations**](index=9&type=section&id=SPOK%20HOLDINGS%2C%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The condensed consolidated statements of operations show total revenue of **$35.686 million** for Q2 2025, with net income of **$4.552 million**, resulting in basic net income per common share of **$0.22**. Operating income improved to **15.1%** of total revenue Condensed Consolidated Statements of Operations (Unaudited and in thousands) | | | For the three months ended | | | | For the six months ended | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | | 6/30/2025 | | 6/30/2024 | | 6/30/2025 | | 6/30/2024 | | Revenue: | | | | | | | | | | Wireless | $ | 18,440 | $ | 18,297 | $ | 36,914 | $ | 36,892 | | Software | | 17,246 | | 15,685 | | 35,066 | | 31,999 | | Total revenue | | 35,686 | | 33,982 | | 71,980 | | 68,891 | | Operating expenses: | | | | | | | | | | Cost of revenue (exclusive of items shown separately | | | | | | | | | | below) | | 7,331 | | 7,163 | | 14,543 | | 14,302 | | Research and development | | 3,024 | | 3,176 | | 6,079 | | 6,127 | | Technology operations | | 5,895 | | 6,181 | | 11,745 | | 12,480 | | Selling and marketing | | 4,267 | | 3,506 | | 9,112 | | 7,655 | | General and administrative | | 8,903 | | 8,067 | | 17,301 | | 16,051 | | Depreciation and accretion | | 854 | | 1,067 | | 1,713 | | 2,135 | | Severance and restructuring | | 20 | | 348 | | 77 | | 776 | | Total operating expenses | | 30,294 | | 29,508 | | 60,570 | | 59,526 | | % of total revenue | | 84.9 % | | 86.8 % | | 84.1 % | | 86.4 % | | Operating income | | 5,392 | | 4,474 | | 11,410 | | 9,365 | | % of total revenue | | 15.1 % | | 13.2 % | | 15.9 % | | 13.6 % | | Interest income | | 256 | | 391 | | 475 | | 645 | | Other income (expense) | | 734 | | (14) | | 756 | | (16) | | Income before income taxes | | 6,382 | | 4,851 | | 12,641 | | 9,994 | | Provision for income taxes | | (1,830) | | (1,426) | | (2,893) | | (2,333) | | Net income | $ | 4,552 | $ | 3,425 | $ | 9,748 | $ | 7,661 | | Basic net income per common share | $ | 0.22 | $ | 0.17 | $ | 0.48 | $ | 0.38 | | Diluted net income per common share | $ | 0.22 | $ | 0.17 | $ | 0.47 | $ | 0.37 | | Basic weighted average common shares outstanding | | 20,580,044 | | 20,252,452 | | 20,510,561 | | 20,211,500 | | Diluted weighted average common shares outstanding | | 20,750,971 | | 20,473,751 | | 20,746,786 | | 20,500,335 | | Cash dividends declared per common share | | 0.3125 | | 0.3125 | | 0.6250 | | 0.6250 | [**Condensed Consolidated Balance Sheets**](index=10&type=section&id=SPOK%20HOLDINGS%2C%20INC.%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, total assets were **$208.670 million**, with cash and cash equivalents at **$20.242 million**. Total liabilities stood at **$57.734 million**, and total stockholders' equity was **$150.936 million** Condensed Consolidated Balance Sheets (in thousands) | | | 6/30/2025 | | 12/31/2024 | | | :--- | :--- | :--- | :--- | :--- | :--- | | ASSETS | | (Unaudited) | | | | | Current assets: | | | | | | | Cash and cash equivalents | $ | 20,242 | $ | 29,145 | | | Accounts receivable, net | | 25,819 | | 21,950 | | | Prepaid expenses | | 9,620 | | 9,362 | | | Other current assets | | 794 | | 840 | | | Total current assets | | 56,475 | | 61,297 | | | Non-current assets: | | | | | | | Property and equipment, net | | 6,083 | | 5,952 | | | Operating lease right-of-use assets | | 7,317 | | 8,249 | | | Goodwill | | 99,175 | | 99,175 | | | Deferred income tax assets, net | | 39,088 | | 41,686 | | | Other non-current assets | | 532 | | 744 | | | Total non-current assets | | 152,195 | | 155,806 | | | Total assets | $ | 208,670 | $ | 217,103 | | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | Current liabilities: | | | | | | | Accounts payable | $ | 3,836 | $ | 5,630 | | | Accrued compensation and benefits | | 5,877 | | 7,363 | | | Deferred revenue | | 28,541 | | 28,366 | | | Operating lease liabilities | | 2,779 | | 2,904 | | | Other current liabilities | | 4,411 | | 4,511 | | | Total current liabilities | | 45,444 | | 48,774 | | | Non-current liabilities: | | | | | | | Asset retirement obligations | | 5,760 | | 5,945 | | | Operating lease liabilities | | 5,056 | | 5,869 | | | Other non-current liabilities | | 1,474 | | 1,769 | | | Total non-current liabilities | | 12,290 | | 13,583 | | | Total liabilities | | 57,734 | | 62,357 | | | Commitments and contingencies | | | | | | | Stockholders' equity: | | | | | | | Preferred stock | $ | — | $ | — | | | Common stock | | 2 | | 2 | | | Additional paid-in capital | | 105,528 | | 105,736 | | | Accumulated other comprehensive loss | | (1,762) | | (1,784) | | | Retained earnings | | 47,168 | | 50,792 | | | Total stockholders' equity | | 150,936 | | 154,746 | | | Total liabilities and stockholders' equity | $ | 208,670 | $ | 217,103 | | [**Condensed Consolidated Statements of Cash Flows**](index=11&type=section&id=SPOK%20HOLDINGS%2C%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash provided by operating activities was **$9.290 million**, while net cash used in investing and financing activities was **$1.090 million** and **$17.125 million**, respectively, leading to a net decrease in cash and cash equivalents Condensed Consolidated Statements of Cash Flows (Unaudited and in thousands) | (Unaudited and in thousands) | | :--- | | | | | For the six months ended | | | :--- | :--- | :--- | :--- | :--- | | | | 6/30/2025 | | 6/30/2024 | | Operating activities: | | | | | | Net income | $ | 9,748 | $ | 7,661 | | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | Depreciation and accretion | | 1,713 | | 2,135 | | Deferred income tax expense | | 2,615 | | 2,313 | | Stock-based compensation | | 2,493 | | 2,307 | | Gain on sale of domain name | | (701) | | — | | Provisions for credit losses, service credits and other | | 539 | | 262 | | Changes in assets and liabilities: | | | | | | Accounts receivable | | (4,415) | | 223 | | Prepaid expenses and other assets | | (18) | | (1,232) | | Net operating lease liabilities | | (6) | | (11) | | Accounts payable and other liabilities | | (3,201) | | (3,046) | | Deferred revenue | | 523 | | (1,192) | | Net cash provided by operating activities | | 9,290 | | 9,420 | | Investing activities: | | | | | | Purchases of property and equipment | | (1,791) | | (1,516) | | Proceeds from sale of domain name | | 701 | | — | | Net cash used in investing activities | | (1,090) | | (1,516) | | Financing activities: | | | | | | Cash distributions to stockholders | | (14,424) | | (13,715) | | Proceeds from issuance of common stock under the Employee Stock Purchase Plan | | 142 | | 131 | | Purchase of common stock for tax withholding on vested equity awards | | (2,843) | | (2,428) | | Net cash used in financing activities | | (17,125) | | (16,012) | | Effect of exchange rate on cash and cash equivalents | | 22 | | (6) | | Net decrease in cash and cash equivalents | | (8,903) | | (8,114) | | Cash and cash equivalents, beginning of period | | 29,145 | | 31,989 | | Cash and cash equivalents, end of period | $ | 20,242 | $ | 23,875 | | Supplemental disclosure: | | | | | | Income taxes paid | $ | 114 | $ | 241 | [**Wireless Units in Service and ARPU**](index=12&type=section&id=SPOK%20HOLDINGS%2C%20INC.%20UNITS%20IN%20SERVICE%2C%20MARKET%20SEGMENTS%2C%20AND%20AVERAGE%20REVENUE%20PER%20UNIT%20%28ARPU%29) As of June 30, 2025, total wireless units in service decreased to **694,000**, a **7.1%** decline year-over-year, though the average revenue per unit (ARPU) increased by **4.6%** to **$8.20**. Healthcare remains the dominant market segment, accounting for **85.7%** of total units Wireless Units in Service, Market Segments, and ARPU (Unaudited and in thousands) | | | | | | | | | | For the three months ended | | | | | | | | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | | 6/30/2025 | | 3/31/2025 | | 12/31/2024 | | 9/30/2024 | | | 6/30/2024 | | 3/31/2024 | | 12/31/2023 | | 9/30/2023 | | Account size ending | | | | | | | | | | | | | | | | | | | units in service | | | | | | | | | | | | | | | | | | | (000's) | | | | | | | | | | | | | | | | | | | 1 to 100 units | | 38 | | 39 | | 40 | | 41 | | | 42 | | 43 | | 44 | | 46 | | 101 to 1,000 units | | 116 | | 121 | | 120 | | 125 | | | 128 | | 135 | | 142 | | 143 | | >1,000 units | | 540 | | 545 | | 560 | | 564 | | | 577 | | 575 | | 579 | | 596 | | Total | | 694 | | 705 | | 720 | | 730 | | | 747 | | 753 | | 765 | | 785 | | Market segment as a | | | | | | | | | | | | | | | | | | | percent of total ending units in | | | | | | | | | | | | | | | | | | | service | | | | | | | | | | | | | | | | | | | Healthcare | | 85.7 % | | 85.5 % | | 85.6 % | | 85.7 % | | | 85.8 % | | 86.1 % | | 85.9 % | | 86.0 % | | Government | | 4.0 % | | 4.0 % | | 4.0 % | | 4.1 % | | | 4.4 % | | 4.1 % | | 4.2 % | | 4.2 % | | Large enterprise | | 3.8 % | | 3.8 % | | 3.9 % | | 4.0 % | | | 4.0 % | | 3.9 % | | 4.1 % | | 4.1 % | | (1) Other | | 6.5 % | | 6.7 % | | 6.5 % | | 6.2 % | | | 5.8 % | | 5.9 % | | 5.8 % | | 5.7 % | | Total | | 100.0 % | | 100.0 % | | 100.0 % | | 100.0 % | | | 100.0 % | | 100.0 % | | 100.0 % | | 100.0 % | | Account size ARPU | | | | | | | | | | | | | | | | | | | 1 to 100 units | $ | 12.88 | $ | 13.04 | $ | 13.08 | $ | 12.70 | | $ | 12.51 | $ | 12.66 | $ | 12.57 | $ | 12.02 | | 101 to 1,000 units | | 9.72 | | 9.64 | | 9.60 | | 9.19 | | | 9.06 | | 9.14 | | 9.16 | | 8.75 | | >1,000 units | | 7.54 | | 7.59 | | 7.50 | | 7.33 | | | 7.21 | | 7.23 | | 7.15 | | 6.97 | | Total | $ | 8.20 | $ | 8.24 | $ | 8.16 | $ | 7.95 | | $ | 7.84 | $ | 7.89 | $ | 7.84 | $ | 7.59 | [**Reconciliation of Non-GAAP Measures**](index=13&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section provides detailed reconciliations of GAAP operating expenses to adjusted operating expenses and net income to adjusted EBITDA for both the three and six months ended June 30, 2025 and 2024, illustrating the adjustments made for non-cash and non-recurring items Adjusted Operating Expenses Reconciliation (Unaudited and in thousands) | | | For the three months ended | | | For the six months ended | | | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | 6/30/2025 | | 6/30/2024 | | 6/30/2025 | | | 6/30/2024 | | Operating expenses | $ | 30,294 | $ | 29,508 | $ | 60,570 | $ | 59,526 | | Add back: | | | | | | | | | | Depreciation and accretion | | (854) | | (1,067) | | (1,713) | | (2,135) | | Severance and restructuring | | (20) | | (348) | | (77) | | (776) | | Adjusted operating expenses | $ | 29,420 | $ | 28,093 | $ | 58,780 | $ | 56,615 | Adjusted EBITDA Reconciliation (Unaudited and in thousands) | | | For the three months ended | | | | | For the six months ended | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | 6/30/2025 | | 6/30/2024 | | 6/30/2025 | | | 6/30/2024 | | Net income | $ | 4,552 $ | | 3,425 $ | | 9,748 | $ | 7,661 | | Add back: | | | | | | | | | | Provision for income taxes | | 1,830 | | 1,426 | | 2,893 | | 2,333 | | Other income (expense) | | (734) | | 14 | | (756) | | 16 | | Interest income | | (256) | | (391) | | (475) | | (645) | | Depreciation and accretion | | 854 | | 1,067 | | 1,713 | | 2,135 | | EBITDA | $ | 6,246 $ | | 5,541 $ | | 13,123 | $ | 11,500 | | Adjustments: | | | | | | | | | | Stock-based compensation | | 1,223 | | 1,159 | | 2,493 | | 2,307 | | Severance and restructuring | | 20 | | 348 | | 77 | | 776 | | Adjusted EBITDA | $ | 7,489 $ | | 7,048 $ | | 15,693 | $ | 14,583 |

Group 1 - Stork Research focuses on micro-cap and small-cap equities that exhibit strong growth at reasonable valuations, emphasizing a GARP (Growth at a Reasonable Price) strategy [2] - The analysis covers sectors such as industrials and technology, which are historically rich in multi-bagger potential [2] - The geographic scope of Stork Research includes the U.S., Canada, and select European markets, specifically Poland and Germany [2] Group 2 - Stork Research aims to uncover inefficiencies in the market and identify unique, high-conviction investment ideas that are often overlooked [2] - The firm typically avoids highly cyclical industries but may target recovery-phase opportunities or contrarian plays in overvalued names [2]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q1 2025, detailing financial position, operational performance, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects a decrease in total assets to $204.5 million, driven by reduced cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $19,873 | $29,145 | | Total current assets | $50,405 | $61,297 | | Goodwill | $99,175 | $99,175 | | Total assets | $204,476 | $217,103 | | **Liabilities & Equity** | | | | Total current liabilities | $40,767 | $48,774 | | Total liabilities | $52,738 | $62,357 | | Total stockholders' equity | $151,738 | $154,746 | | Total liabilities and stockholders' equity | $204,476 | $217,103 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total revenue increased to $36.3 million in Q1 2025, driven by software growth, leading to a net income of $5.2 million Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total revenue** | **$36,294** | **$34,909** | | Wireless revenue | $18,474 | $18,595 | | Software revenue | $17,820 | $16,314 | | Total operating expenses | $30,276 | $30,018 | | **Operating income** | **$6,018** | **$4,891** | | **Net income** | **$5,196** | **$4,236** | | Diluted net income per common share | $0.25 | $0.21 | | Cash dividends declared per common share | $0.3125 | $0.3125 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating activities generated $2.3 million in Q1 2025, with a net decrease in cash and cash equivalents of $9.3 million Cash Flow Summary for the Three Months Ended March 31 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,253 | $1,998 | | Net cash used in investing activities | ($745) | ($875) | | Net cash used in financing activities | ($10,790) | ($9,814) | | **Net decrease in cash and cash equivalents** | **($9,272)** | **($8,649)** | | Cash and cash equivalents, end of period | $19,873 | $23,340 | [Unaudited Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Unaudited%20Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, business operations, and financial statement components, including revenue disaggregation and dividends - Spok is a global leader in healthcare communications, delivering clinical information to care teams through wireless messaging and enterprise-wide systems for contact centers, clinical alerting, and mobile communications[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) Revenue Disaggregation by Type (in thousands) | Revenue Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Wireless Revenue** | **$18,474** | **$18,595** | | Paging revenue | $17,607 | $17,970 | | Product and other revenue | $867 | $625 | | **Software Revenue** | **$17,820** | **$16,314** | | License | $2,631 | $2,626 | | Professional services - projects | $4,471 | $3,561 | | Professional services - managed services | $1,315 | $464 | | Hardware | $321 | $384 | | Maintenance | $9,082 | $9,279 | | **Total Revenue** | **$36,294** | **$34,909** | - The balance of remaining performance obligations was **$63.2 million** as of March 31, 2025. The company expects to recognize approximately **$36.5 million** of this amount over the next 12 months[45](index=45&type=chunk) - The company declared a quarterly cash dividend of **$0.3125 per share** on February 26, 2025, totaling **$6.6 million**. A subsequent dividend of the same amount was declared on April 30, 2025[58](index=58&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, highlighting revenue growth, operating income increase, and liquidity position Q1 2025 vs Q1 2024 Results Summary (in thousands) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $36,294 | $34,909 | 4.0% | | Wireless Revenue | $18,474 | $18,595 | (0.7)% | | Software Revenue | $17,820 | $16,314 | 9.2% | | Operating Income | $6,018 | $4,891 | 23.0% | | Net Income | $5,196 | $4,236 | 22.7% | [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Total revenue increased by 4.0% year-over-year, driven by software growth, while wireless revenue saw a slight decline - The decrease in wireless revenue was driven by a secular decline in wireless units in service (from **753k** to **705k** YoY), which was partially offset by an increase in ARPU from **$7.89** to **$8.24** due to price increases initiated in September 2024[101](index=101&type=chunk) - Software revenue growth was primarily due to increased professional services revenue, resulting from higher sales and hiring efforts to align staffing with a growing backlog[106](index=106&type=chunk) - Selling and marketing expenses increased by **$0.7 million (16.8%)** due to additional headcount, higher advertising and event expenses, and increased commissions related to software bookings[110](index=110&type=chunk) - Technology operations expenses decreased by **$0.4 million (7.1%)** due to network rationalization efforts, which reduced the number of active transmitters by **6.3%** year-over-year[109](index=109&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by cash from operations and its cash balance, deemed sufficient for future needs - As of March 31, 2025, the company held cash and cash equivalents of **$19.9 million**[113](index=113&type=chunk) Cash Flow Summary for the Three Months Ended March 31 (in thousands) | Activity | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $2,253 | $1,998 | $255 | | Net cash used in investing activities | ($745) | ($875) | $130 | | Net cash used in financing activities | ($10,790) | ($9,814) | ($976) | - The Board of Directors authorized a share repurchase program for up to **$10 million** of the company's common stock in February 2022[118](index=118&type=chunk) [Commitments and Contingencies](index=26&type=section&id=Commitments%20and%20Contingencies) Total contractual obligations as of March 31, 2025, amounted to $14.35 million, including operating leases and purchase obligations Contractual Obligations as of March 31, 2025 (in thousands) | Obligation Type | Total | 1 year or less | 1 to 3 years | 3 to 5 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating lease obligations | $9,761 | $3,201 | $4,065 | $1,515 | $980 | | Unconditional purchase obligations | $4,589 | $2,218 | $2,371 | $— | $— | | **Total contractual obligations** | **$14,350** | **$5,419** | **$6,436** | **$1,515** | **$980** | [Quantitative and Qualitative Disclosures about Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports minimal exposure to market risk, with no outstanding debt and immaterial foreign currency exchange risk - As of March 31, 2025, the company had no outstanding debt and therefore no material exposure to interest rate risk[135](index=135&type=chunk) - The financial impact of transactions in foreign currencies is immaterial, resulting in no material exposure to foreign currency exchange rate risk[136](index=136&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Management, including the principal executive officer and principal financial officer, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[137](index=137&type=chunk) - No changes were made to the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[138](index=138&type=chunk) [PART II. OTHER INFORMATION](index=27&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) No material changes to legal proceedings were reported during Q1 2025, consistent with the 2024 Annual Report - There have been no material changes during the three months ended March 31, 2025, to the commitments and contingencies previously reported in the 2024 Annual Report[83](index=83&type=chunk)[139](index=139&type=chunk) [Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) The risk factors disclosed in the 2024 Annual Report on Form 10-K have not materially changed during Q1 2025 - The risk factors included in the 2024 Annual Report have not materially changed during the three months ended March 31, 2025[140](index=140&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any shares of its common stock during the three months ended March 31, 2025 - The Company did not repurchase any shares of its common stock during the three months ended March 31, 2025[141](index=141&type=chunk) [Other Information](index=28&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement in Q1 2025 - During the three months ended March 31, 2025, no director or officer of the Company adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement'[142](index=142&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed, including CEO and CFO certifications and Inline XBRL financial data files - The exhibits filed with this report include certifications from the Chief Executive Officer and Chief Financial Officer, as well as Inline XBRL documents[143](index=143&type=chunk)[145](index=145&type=chunk)

Group 1: Earnings Performance - Spok Holdings reported quarterly earnings of $0.25 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, and up from $0.21 per share a year ago, representing an earnings surprise of 38.89% [1] - The company posted revenues of $36.29 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 6.75%, compared to year-ago revenues of $34.91 million [2] Group 2: Stock Performance and Outlook - Spok shares have declined approximately 10.2% since the beginning of the year, while the S&P 500 has decreased by 5.5% [3] - The current consensus EPS estimate for the upcoming quarter is $0.20 on revenues of $34.3 million, and for the current fiscal year, it is $0.79 on revenues of $138 million [7] Group 3: Industry Context - The Wireless National industry, to which Spok belongs, is currently ranked in the top 31% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Cambium (CMBM), another company in the same industry, is expected to report a quarterly loss of $0.11 per share, reflecting a year-over-year change of +76.1%, with revenues anticipated to be $45.53 million, up 7.5% from the previous year [9]