Spok(SPOK) - 2024 Q4 - Annual Report

Revenue Performance - Total revenue for 2024 was $137,653 thousand, a decrease of 1.0$139,025 thousand in 2023[185]. - Wireless revenue decreased to $73,523 thousand, down 3.2$75,968 thousand in 2023, reflecting a decline in units in service from approximately 765 thousand to 720 thousand[196]. - Software revenue increased to $64,130 thousand, up 1.7$63,057 thousand in 2023, driven by higher professional services revenue[200]. Income and Expenses - Operating income for 2024 was $18,965 thousand, a decrease of 10.7$21,228 thousand in 2023[185]. - Net income for 2024 was $14,965 thousand, down 4.5$15,666 thousand in 2023[185]. - Research and development expenses rose to $11,548 thousand, an increase of 9.5$10,549 thousand in 2023[185]. - Cost of revenue increased by $1.6 million, or 6.0$0.5 million, or 3.1%, for the year ended December 31, 2024, attributed to the amortization of commission expenses[210]. - General and administrative expenses increased by $0.1 million, or 0.4$1.5 million, or 5.9%, for the year ended December 31, 2024, due to a 5.2% decline in the number of active transmitters[209]. Cash Flow and Dividends - Net cash provided by operating activities was $28.9 million for the year ended December 31, 2024, compared to$26.2 million in 2023[228]. - Cash and cash equivalents at December 31, 2024, totaled $29.1 million, with a majority held in accounts exceeding insured limits[218]. - The company intends to use cash on hand for working capital, operations, and potential acquisitions[220]. - A regular quarterly cash dividend of$0.3125 per share was declared, amounting to approximately $6.4 million, expected to be paid from available cash[223]. Obligations and Financial Health - Total contractual obligations as of December 31, 2024, amount to$15,444,000, with $10,548,000 due within one year[233]. - Operating lease obligations total$10,548,000, with $3,479,000 due in less than one year and$4,285,000 due in 1 to 3 years[233]. - The company maintained a valuation allowance of $2.3 million related to federal foreign tax credits and certain state net operating losses[244]. - There were no outstanding borrowings or associated debt service requirements as of December 31, 2024[250]. Impairment and Tax Considerations - The company recorded no impairment of goodwill for the years ended December 31, 2024, 2023, and 2022[246]. - The financial impact of transactions billed in foreign currencies is immaterial, indicating no significant exposure to foreign currency exchange rate fluctuations[251]. - Inflation has not materially affected operations, with system equipment and operating costs remaining stable[236]. - The assessment of deferred income tax assets requires significant judgment, with the company considering future taxable income projections[242]. New Products and Services - The company introduced the GenA pager, featuring advanced encryption and security capabilities, aimed at enhancing service offerings in the healthcare sector[198]. - Maintenance revenue is expected to remain flat or increase marginally, driven by enhancements in existing software solutions[203]. Restructuring and Severance - Severance and restructuring expenses increased to$1.1 million in 2024 from $0.6 million in 2023, primarily due to lease termination costs[213]. - No probable losses were identified for the year ended December 31, 2024[234]. - The company did not identify any triggering events for long-lived assets in 2024, with no impairment recorded[247].