Spok Holdings, Inc. (NASDAQ: SPOK), a global leader in healthcare communications, today announced results for the second quarter ended June 30, 2023. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.3125 per share, payable on September 8, 2023, to stockholders of record on August 17, 2023.
Recent Highlights:
- Generated net income of $4.7 million, or $0.23 per diluted share, compared to net income of $1.9 million, or $0.10 per diluted share, in the prior year period
- Generated $8.5 million of adjusted EBITDA in the second quarter, compared to $4.7 million in the second quarter of 2022
- Software operations bookings totaled $14.0 million for the second quarter, compared to $7.4 million in the second quarter of 2022, a 90% year-over-year increase
- Second quarter 2023 software operations bookings included 23 six-figure and 3 seven-figure customer contracts
- Second quarter 2023 software revenue totaled $17.6 million, up more than 24% from the prior quarter and more than 17% from the prior year period
- Second quarter 2023 wireless average revenue per unit (ARPU) was $7.53, up on a year-over-year basis, with units in service down less than 1% from the prior quarter and 3.5% on a trailing-twelve-month basis
- Second quarter 2023 wireless revenue of $18.9 million, up 1% from revenue of $18.7 million in the same period in 2022
- Capital returned to stockholders in the second quarter of 2023 totaled $6.2 million in the form of the Company’s regular quarterly dividend
- Cash and equivalents balance increased from the prior quarter to $30.9 million on June 30, 2023, and no debt
"I am very proud of the record performance that our team was able to deliver in the second quarter and believe that these results position us well for the second half of the year, as we continue to execute our plan focused on growing revenue, generating cash flow and returning capital to stockholders,” said Vincent D. Kelly, chief executive officer of Spok Holdings, Inc. “Last quarter, our team was able to grow revenue, both in total and within each of our two service lines, on a year-over-year basis, reversing historical trends. We made tremendous progress in several key performance areas, including wireless trends, software bookings and backlog levels. Software operations bookings were up 90% on a year-over-year basis and included a record 23 new six-figure and 3 new seven-figure customer contracts. We continued our focus on expense management, as we drove expense reductions on a year-over-year basis, while making the necessary investments in product development and sales and marketing to support the growth of our Spok Care Connect and Wireless solutions. I am also very pleased with our performance in Wireless, as we drove sequential and trailing-twelve-month unit churn down to 0.6% and 3.5%, respectively.
"In short, we are firing on all cylinders," continued Kelly. "Based on our performance in the second quarter we are, once again, increasing our full year 2023 guidance estimates for revenue and adjusted EBITDA generation. We believe we are on track to grow consolidated revenue for 2023, on a year-over-year basis, for the first time in the Company's history and the low point of our revenue guidance reflects that. We look forward to continued success in the second half of the year and believe our extensive experience operating our established communication solutions will create significant value for stockholders by maximizing revenue and cash flow generation.”
Financial Highlights:
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | Change (%) | 2023 | 2022 | Change (%) | ||||||||||||
Revenue | ||||||||||||||||||
Wireless revenue | ||||||||||||||||||
Paging revenue | $ | 18,271 | $ | 18,141 | 0.7 | % | $ | 36,796 | $ | 36,454 | 0.9 | % | ||||||
Product and other revenue | 606 | 559 | 8.4 | % | 1,109 | 1,093 | 1.5 | % | ||||||||||
Total wireless revenue | $ | 18,877 | $ | 18,700 | 0.9 | % | $ | 37,905 | $ | 37,547 | 1.0 | % | ||||||
Software revenue | ||||||||||||||||||
License | $ | 3,692 | $ | 1,962 | 88.2 | % | $ | 5,310 | $ | 3,786 | 40.3 | % | ||||||
Professional services | 3,837 | 3,331 | 15.2 | % | 7,076 | 6,667 | 6.1 | % | ||||||||||
Hardware | 933 | 507 | 84.0 | % | 1,289 | 1,096 | 17.6 | % | ||||||||||
Maintenance | 9,124 | 9,210 | (0.9 | )% | 18,063 | 18,439 | (2.0 | )% | ||||||||||
Total software revenue | 17,586 | 15,010 | 17.2 | % | 31,738 | 29,988 | 5.8 | % | ||||||||||
Total revenue | $ | 36,463 | $ | 33,710 | 8.2 | % | $ | 69,643 | $ | 67,535 | 3.1 | % | ||||||
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | Change(%) | 2023 | 2022 | Change(%) | ||||||||||||
GAAP | ||||||||||||||||||
Operating expenses | $ | 30,248 | $ | 31,298 | (3.4 | )% | $ | 58,711 | $ | 73,791 | (20.4 | )% | ||||||
Net income (loss) | $ | 4,733 | $ | 1,924 | 146.0 | % | $ | 7,850 | $ | (5,290 | ) | 248.4 | % | |||||
Cash, cash equivalents, and short-term investments (as of period end) | $ | 30,866 | $ | 38,432 | (19.7 | )% | $ | 30,866 | $ | 38,432 | (19.7 | )% | ||||||
Capital returned to stockholders | $ | 6,230 | $ | 6,155 | 1.2 | % | $ | 13,163 | $ | 12,679 | 3.8 | % | ||||||
Non-GAAP | ||||||||||||||||||
Adjusted operating expenses | $ | 28,875 | $ | 29,977 | (3.7 | )% | $ | 56,092 | $ | 67,041 | (16.3 | )% | ||||||
Adjusted EBITDA | $ | 8,511 | $ | 4,694 | 81.3 | % | $ | 15,410 | $ | 2,570 | 499.6 | % | ||||||
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||||
(Dollars in thousands, excluding units and service and ARPU) | 2023 | 2022 | Change(%) | 2023 | 2022 | Change(%) | ||||||||||||
Key Statistics | ||||||||||||||||||
Wireless units in service | 806 | 835 | (3.5 | )% | 806 | 835 | (3.5 | )% | ||||||||||
Wireless average revenue per unit (ARPU) | $ | 7.53 | $ | 7.23 | 4.1 | % | $ | 7.56 | $ | 7.22 | 4.7 | % | ||||||
Software operations bookings(1) | $ | 14,010 | $ | 7,374 | 90.0 | % | $ | 19,688 | $ | 12,586 | 56.4 | % | ||||||
Software backlog (as of period end) | $ | 56,980 | $ | 44,488 | 28.1 | % | $ | 56,980 | $ | 44,488 | 28.1 | % | ||||||
1) Software operations bookings includes net new (i.e., new customers or incremental add-on sales to existing customers) sales of license, professional services, equipment, and first-year maintenance.
Financial Outlook:
The Company also increased its financial guidance and now expects the following for the full year 2023:
(Unaudited and in millions) | Current Guidance Full Year 2023 | Prior Guidance Full Year 2023 | ||||||||||
From | To | From | To | |||||||||
Revenue | ||||||||||||
Wireless | $ | 74.5 | $ | 75.5 | $ | 73.0 | $ | 75.5 | ||||
Software | $ | 60.0 | $ | 62.0 | $ | 58.0 | $ | 62.0 | ||||
Total Revenue | $ | 134.5 | $ | 137.5 | $ | 131.0 | $ | 137.5 | ||||
Adjusted EBITDA | $ | 25.0 | $ | 28.0 | $ | 24.5 | $ | 26.5 | ||||
2023 Second Quarter Call:
Management will host a conference call and webcast to discuss these financial results on Thursday, July 27, 2023, at 9:00 a.m. Eastern Time. The presentation is open to all interested parties and may include forward-looking information.
Conferenc
