News Release
Spok Reports 2021 Second Quarter Results
Alexandria, Va. (July 28, 2021) – Spok Holdings, Inc. (NASDAQ: SPOK), a global leader in healthcare communications, today announced results for the second quarter ended June 30, 2021. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.125 per share, payable on September 10, 2021, to stockholders of record on August 17, 2021.
Key Second Quarter 2021 Operating Highlights:
- Second quarter 2021 software revenue of $15.9 million included $9.6 million of maintenance revenue and $6.3 million of operations revenue. This was up from the second quarter 2020 software revenue of $14.7 million, which included $9.5 million of maintenance revenue and $5.2 million of operations revenue.
- Software bookings in the second quarter of 2021 totaled $13.0 million, compared to $15.4 million in the prior year quarter. Second quarter software bookings included two Spok Go® deals from existing customers transitioning to the new platform with an aggregate total contract value of approximately $1.3 million. Second quarter software bookings also included $3.0 million of legacy operations bookings and $8.7 million of maintenance renewals. As of June 30, 2021, the software revenue backlog totaled $45.6 million, compared to the backlog of $48.4 million at June 30, 2020.
- The quarterly rate of paging unit erosion was 0.6% in the second quarter of 2021, compared to paging unit erosion of 1.2% in the second quarter of 2020.
- Total paging ARPU (average revenue per unit) in the second quarter of 2021 totaled $7.32, up from ARPU of $7.24 in the second quarter of 2020, primarily due to the recovery of Telecommunications Relay Service Charges (TRS) that began in early 2021, and general increases of Universal Service Fees (USF). USF and TRS fees are effectively pass-through items that have corresponding costs associated with them. Excluding these pass-through items, ARPU would have been in-line with historical trends.
- Operating expenses in the second quarter of 2021 totaled $37.3 million, up from $32.6 million in the second quarter of 2020. Adjusted operating expenses (which excludes depreciation, amortization and accretion charges, and includes capitalized software development costs) totaled $37.6 million in the second quarter of 2021, compared to adjusted operating expenses of $34.1 million in the second quarter of 2020.
- Capital expenses were $1.5 million in the second quarter of 2021, compared to $0.8 million in the second quarter of 2020.
- The number of full-time equivalent employees as of June 30, 2021 totaled 590, compared to 610 at June 30, 2020.
- Capital paid to stockholders in the second quarter of 2021 totaled $2.5 million. This came in the form of the Company’s regular quarterly dividend.
- The Company’s cash, cash equivalents and short-term investments balance as of June 30, 2021 was $68.1 million, compared to $78.7 million at December 31, 2020.
Management Commentary:
“We made progress in several key performance areas with software revenue up more than 8% from prior year levels, continued improvement in wireless trends, and continued expense management that resulted in declines in many expense categories,” said Vincent D. Kelly, president and chief executive officer. “However, our second quarter results demonstrate the continuation of the very challenging selling environment we are operating in as a result of the COVID-19 pandemic and the related impact on our customers budgets and their ability to focus on new projects. While we were not satisfied with the level of software revenue bookings in the second quarter, given the slow recovery in the healthcare industry, we believe that seasonality and timing had a large impact on performance. We remain encouraged by the size and quality of the pipeline of software deals for the second half of 2021 and believe that we will exit the year on very firm footing.
“We launched Spok Go, our software-as-a-service, cloud-native platform just over a year ago, at the onset of the pandemic. In the second quarter, we added two more Spok Go wins, bringing the aggregate contract value for that product to $3.1 million. Spok is a company with a strong operational foundation built on three pillars. First is our paging network, the largest in the United States, generating strong margins. Next is our Spok Care Connect® suite of products with a valuable maintenance revenue stream that contributed $38.6 million in 2020. Last is our new subscription-based, cloud-native Spok Go platform that we believe has strong potential.
“Finally, Spok continues to demonstrate its stable revenue base, with over 82 percent of second quarter 2021 revenues recurring in nature, coming from either our legacy wireless business or software maintenance contracts. This, combined with disciplined expense control, gives us confidence as we enter the second half of the year. Spok Go provides a critical function that we believe will become even more important in this environment. Our clinical communications platform provides hospitals with a system of action, not just of record, delivering reliable communications and clinical information, including clinical test results, to care teams when and where it matters most to improve patient outcomes,” concluded Kelly.
2021 Second Quarter and Year-to-Date Results:
Consolidated revenue for the second quarter of 2021 under Generally Accepted Accounting Principles (“GAAP”) was $35.7 million, compared to $35.7 million in the second quarter of 2020. For the first six months of 2021, consolidated revenue totaled $71.8 million, compared to $73.0 million in the prior year period.
For the three months ended | For the six months ended | ||||||||||||||||||||
(Dollars in thousands) | June 30, 2021 | June 30, 2020 | Change (%) | June 30, 2021 | June 30, 2020 | Change (%) | |||||||||||||||
Wireless revenue | |||||||||||||||||||||
Paging revenue | $ | 19,135 | $ | 19,990 | (4.3) | % | $ | 38,488 | $ | 40,441 | (4.8) | % | |||||||||
Product and other revenue | 724 | 1,088 | (33.5) | % | 1,491 | 2,024 | (26.3) | % | |||||||||||||
Total wireless revenue | $ | 19,859 | $ | 21,078 | (5.8) | % | $ | 39,979 | $ | 42,465 | (5.9) | % | |||||||||
Software revenue | |||||||||||||||||||||
License | $ | 818 | $ | 749 | 9.2 | % | $ | 2,325 | $ | 1,704 | 36.4 | % | |||||||||
Services | $ | 4,865 | $ | 3,812 | 27.6 | % | $ | 9,219 | $ | 8,359 | 10.3 | % | |||||||||
Equipment | $ | 482 | $ | 601 | (19.8) | % | $ | 1,098 | $ | 1,327 | (17.3) | % | |||||||||
Subscription | $ | 90 | $ | — | — | % | $ | 135 | $ | — | — | % | |||||||||
Maintenance | 9,609 | 9,499 | 1.2 | % | 19,003 | 19,151 | (0.8) | % | |||||||||||||
Total software revenue | 15,864 | 14,661 | 8.2 | % | 31,780 | 30,541 | 4.1 | % | |||||||||||||
Total revenue | $ | 35,723 | $ | 35,739 | — | % | $ | 71,759 | $ | 73,006 | (1.7) | % | |||||||||
GAAP net loss for the second quarter of 2021 was $0.7 million, or a loss of $0.04 per diluted share, compared to a net income of $3.8 million, or $0.20 per basic and diluted share, in the second quarter of 2020. GAAP net loss for the first six months of 2021 was $3.0 million, or a loss of $0.16 per diluted share, compared to a net loss of $0.8 million, or $0.04 per diluted share, in the prior year period.
In the second quarter of 2021, adjusted EBITDA loss totaled $0.1 million compared to adjusted EBITDA of $3.0 million in the second quarter of 2020. In the first six months of 2021, the Company generated $0.2 million of adjusted EBITDA, compared to adjusted EBITDA of $0.5 million in the prior year period.
For the three months ended | For the six months ended | ||||||||||||||||||||
(Dollars in thousands) | June 30, 2021 | June 30, 2020 | Change (%) | June 30, 2021 | June 30, 2020 | Change (%) | |||||||||||||||
Net (loss) income | $ | (719) | $ | 3,759 | 119.1 | % | $ | (3,016) | $ | (780) | (286.7) | % | |||||||||
Basic and diluted net (loss) income per common share | $ | (0.04) | $ | 0.20 | 120.0 | % | $ | (0.16) | $ | (0.04) | (300.0) | % | |||||||||
Adjusted EBITDA | $ | (69) | $ | 2,997 | 102.3 | % | $ | 237 | $ | 514 | 53.9 | % | |||||||||
Financial Outlook:
The Company is reiterating the guidance for fiscal 2021 as provided when it reported its first quarter 2021 results as follows:
(Unaudited and in millions) | Current Guidance Full Year 2021 | |||||||
Revenue | ||||||||
Wireless | $ | 77.0 | to | $ | 81.0 | |||
Software | $ | 61.0 | $ | 70.0 | ||||
Total Revenue | $ | 138.0 | $ | 151.0 | ||||
Adjusted Operating Expenses | $ | 151.0 | $ | 157.0 | ||||
Capital Expenditures | $ | 3.5 | $ | 5.5 | ||||
“We are confident in our performance for the second half of 2021, which is reinforced by the fact that we are reiterating the guidance we provided last quarter,” said Michael W. Wallace, chief operating officer and chief financial officer. “Disciplined expense management continues to be a key focus, as we further align expense levels with market demand for our products. In the second quarter of 2021, both operating expenses and adjusted operating expenses were down sequentially, with improvements in many expense categories over that period. Spok’s balance sheet remains strong, as the cash, cash equivalents and short-term investments balance was $68.1 million at June 30, 2021, and we are still operating with no debt.”
2021 Annual Stockholders Meeting:
The Company had previously announced the results of its 2021 Annual Meeting of Stockholders. At that meeting, each of the 10 nominees to the Company’s board of directors were elected for one-year terms, and the stockholders ratified the appointment of Grant Thornton LLP as the Company’s independent auditor for the year ending December 31, 2021 and approved, in an advisory vote, the compensation of Spok’s named executive officers, as described in the 2021 proxy statement.
Final voting results are disclosed in a current report on Form 8-K filed with the SEC.
2021 Investor Day Program:
As previously disclosed, Spok also announced that it plans to host an investor day on October 11, 2021. The investor day program will feature presentations by management and will be run concurrently with Spok’s annual user conference, Connect 21. Due to the recent uptick in COVID-19 cases across the nation related to the Delta variant, this year’s investor day and Connect 21 conference will be held virtually. The Company will provide more details in the future.
* * * * * * * * *
2021 Second Quarter Call and Replay:
Spok plans to host a conference call for investors to discuss its 2021 second quarter results on Thursday, July 29, 2021 at 10:00 a.m. ET. Dial-in numbers for the call are 1 334-323-0501 or 800-353-6461. The confirmation code for the call is 1286071. A replay of the call will be available from 1:00 p.m. ET on July 29, 2021 until 1:00 p.m. ET on Thursday, August 12, 2021. To listen to the replay, please register at http://tinyurl.com/Spok2021Q2earningsreplay. Please cut and paste this address into your browser, enter the registration information, and you will be given access to the replay.
* * * * * * * * *
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: adjusted operating expenses and adjusted EBITDA. Adjusted operating expenses excludes depreciation, amortization and accretion and includes capitalized software development costs. Adjusted EBITDA represents net income/(loss) before interest income/expense, income tax expense/benefit, depreciation, amortization and accretion expense and stock-based compensation expense, and includes capitalized software development costs.
We believe that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to Spok’s financial condition and results of operations. We use these non-GAAP measures for financial, operational and budgetary decision-making purposes, to understand and evaluate our core operating performance and trends, and to generate future operating plans. We believe that these non-GAAP financial measures permit us to more thoroughly analyze key financial metrics used to make operational decisions and allow us to assess our core operating results. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other software companies who present similar non-GAAP financial measures. We adjust for certain items because we do not regard these costs as reflective of normal costs related to the ongoing operation of the business in the ordinary course. In general, these items possess one or more of the following characteristics; non-cash expenses, factors outside of our control, items that are non-operational in nature, and unusual items not expected to occur in the normal course of business.
We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures, which are included in this press release, and not to rely on any single financial measure to evaluate our business.
Tables to Follow
SPOK HOLDINGS, INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a) | ||||||||||||||||
(Unaudited and in thousands except share, per share amounts and ARPU) | ||||||||||||||||
For the three months ended | For the six months ended | |||||||||||||||
6/30/2021 | 6/30/2020 | 6/30/2021 | 6/30/2020 | |||||||||||||
Revenue: | ||||||||||||||||
Wireless | $ | 19,859 | $ | 21,078 | $ | 39,979 | $ | 42,465 | ||||||||
Software | 15,864 | 14,661 | 31,780 | 30,541 | ||||||||||||
Total revenue | 35,723 | 35,739 | 71,759 | 73,006 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of revenue | 6,973 | 5,901 | 14,214 | 14,165 | ||||||||||||
Research and development | 4,278 | 2,754 | 8,784 | 8,203 | ||||||||||||
Technology operations | 7,087 | 7,212 | 14,339 | 15,115 | ||||||||||||
Selling and marketing | 4,980 | 3,831 | 9,880 | 10,192 | ||||||||||||
General and administrative | 11,557 | 10,810 | 22,707 | 22,061 | ||||||||||||
Depreciation, amortization and accretion | 2,457 | 2,072 | 5,184 | 4,218 | ||||||||||||
Total operating expenses | 37,332 | 32,580 | 75,108 | 73,954 | ||||||||||||
% of total revenue | 104.5 | % | 91.2 | % | 104.7 | % | 101.3 | % | ||||||||
Operating (loss) income | (1,609) | 3,159 | (3,349) | (948) | ||||||||||||
% of total revenue | (4.5) | % | 8.8 | % | (4.7) | % | (1.3) | % | ||||||||
Interest income | 61 | 146 | 122 | 509 | ||||||||||||
Other income (expense) | 29 | 101 | 2 | (37) | ||||||||||||
(Loss) income before income taxes | (1,519) | 3,406 | (3,225) | (476) | ||||||||||||
Benefit from (provision for) income taxes | 800 | 353 | 209 | (304) | ||||||||||||
Net (loss) income | $ | (719) | $ | 3,759 | $ | (3,016) | $ | (780) | ||||||||
Basic and diluted net (loss) income per common share | $ | (0.04) | $ | 0.20 | $ | (0.16) | $ | (0.04) | ||||||||
Basic weighted average common shares outstanding | 19,395,364 | 19,016,853 | 19,335,081 | 18,987,469 | ||||||||||||
Diluted weighted average common shares outstanding | 19,395,364 | 19,115,148 | 19,335,081 | 18,987,469 | ||||||||||||
Cash dividends declared per common share | 0.125 | 0.125 | 0.25 | 0.25 | ||||||||||||
Key statistics: | ||||||||||||||||
Units in service | 869 | 915 | 869 | 915 | ||||||||||||
Average revenue per unit (ARPU) | $ | 7.32 | $ | 7.24 | $ | 7.31 | $ | 7.27 | ||||||||
Bookings | $ | 13,037 | $ | 15,411 | $ | 27,634 | $ | 31,050 | ||||||||
Backlog | $ | 45,632 | $ | 48,441 | $ | 45,632 | $ | 48,441 | ||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||
SPOK HOLDINGS, INC. | ||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a) | ||||||||||||||||||||||||||||||||
(Unaudited and in thousands except share, per share amounts and ARPU) | ||||||||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||||||||
6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | |||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||
Wireless | $ | 19,859 | $ | 20,120 | $ | 20,300 | $ | 20,828 | $ | 21,078 | $ | 21,386 | $ | 21,615 | $ | 21,814 | ||||||||||||||||
Software | 15,864 | 15,916 | 17,180 | 16,865 | 14,661 | 15,881 | 17,933 | 17,639 | ||||||||||||||||||||||||
Total revenue | 35,723 | 36,036 | 37,480 | 37,693 | 35,739 | 37,267 | 39,548 | 39,453 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Cost of revenue | 6,973 | 7,241 | 7,833 | 6,544 | 5,901 | 8,264 | 8,051 | 7,190 | ||||||||||||||||||||||||
Research and development | 4,278 | 4,506 | 4,166 | 3,459 | 2,754 | 5,449 | 7,132 | 7,437 | ||||||||||||||||||||||||
Technology operations | 7,087 | 7,252 | 7,371 | 7,357 | 7,212 | 7,904 | 8,083 | 7,805 | ||||||||||||||||||||||||
Selling and marketing | 4,980 | 4,900 | 5,004 | 4,272 | 3,831 | 6,361 | 5,891 | 5,595 | ||||||||||||||||||||||||
General and administrative | 11,557 | 11,150 | 10,046 | 10,994 | 10,810 | 11,251 | 11,531 | 11,813 | ||||||||||||||||||||||||
Depreciation, amortization and accretion | 2,457 | 2,727 | 2,503 | 2,335 | 2,072 | 2,146 | 2,250 | 2,305 | ||||||||||||||||||||||||
Goodwill impairment | — | — | 25,007 | — | — | — | 8,849 | — | ||||||||||||||||||||||||
Total operating expenses | 37,332 | 37,776 | 61,930 | 34,961 | 32,580 | 41,375 | 51,787 | 42,145 | ||||||||||||||||||||||||
% of total revenue | 104.5 | % | 104.8 | % | 165.2 | % | 92.8 | % | 91.2 | % | 111.0 | % | 130.9 | % | 106.8 | % | ||||||||||||||||
Operating (loss) income | (1,609) | (1,740) | (24,450) | 2,732 | 3,159 | (4,108) | (12,239) | (2,692) | ||||||||||||||||||||||||
% of total revenue | (4.5) | % | (4.8) | % | (65.2) | % | 7.2 | % | 8.8 | % | (11.0) | % | (30.9) | % | (6.8) | % | ||||||||||||||||
Interest income | 61 | 61 | 51 | 127 | 146 | 363 | 350 | 399 | ||||||||||||||||||||||||
Other income (expense) | 29 | (27) | 95 | 151 | 101 | (137) | 206 | 163 | ||||||||||||||||||||||||
(Loss) income before income taxes | (1,519) | (1,706) | (24,304) | 3,010 | 3,406 | (3,882) | (11,683) | (2,130) | ||||||||||||||||||||||||
Benefit from (provision for) income taxes | 800 | (591) | (22,306) | 155 | 353 | (657) | 2,172 | 804 | ||||||||||||||||||||||||
Net (loss) income | $ | (719) | $ | (2,297) | $ | (46,610) | $ | 3,165 | $ | 3,759 | $ | (4,539) | $ | (9,511) | $ | (1,326) | ||||||||||||||||
Basic net (loss) income per common share | $ | (0.04) | $ | (0.12) | $ | (2.44) | $ | 0.17 | $ | 0.20 | $ | (0.24) | $ | (0.50) | $ | (0.07) | ||||||||||||||||
Diluted net (loss) income per common share | (0.04) | (0.12) | (2.44) | 0.16 | 0.20 | (0.24) | (0.50) | (0.07) | ||||||||||||||||||||||||
Basic weighted average common shares outstanding | 19,395,364 | 19,272,786 | 19,088,329 | 19,051,502 | 19,016,853 | 18,958,716 | 18,860,020 | 19,086,811 | ||||||||||||||||||||||||
Diluted weighted average common shares outstanding | 19,395,364 | 19,272,786 | 19,088,329 | 19,208,452 | 19,115,148 | 18,958,716 | 18,860,020 | 19,086,811 | ||||||||||||||||||||||||
Key statistics: | ||||||||||||||||||||||||||||||||
Units in service | 869 | 874 | 885 | 898 | 915 | 926 | 938 | 955 | ||||||||||||||||||||||||
Average revenue per unit (ARPU) | $ | 7.32 | $ | 7.34 | $ | 7.30 | $ | 7.34 | $ | 7.24 | $ | 7.31 | $ | 7.33 | $ | 7.32 | ||||||||||||||||
Bookings | $ | 13,037 | $ | 14,597 | $ | 16,528 | $ | 21,414 | $ | 15,411 | $ | 15,639 | $ | 21,932 | $ | 20,421 | ||||||||||||||||
Backlog | $ | 45,632 | $ | 48,849 | $ | 50,504 | $ | 51,708 | $ | 48,441 | $ | 49,052 | $ | 50,553 | $ | 42,604 | ||||||||||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||||||||||||||||||
SPOK HOLDINGS, INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (a) | ||||||||
(In thousands) | ||||||||
6/30/2021 | 12/31/2020 | |||||||
ASSETS | Unaudited | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 38,127 | $ | 48,729 | ||||
Short term investments | 29,998 | 29,995 | ||||||
Accounts receivable, net | 27,483 | 29,934 | ||||||
Prepaid expenses | 8,369 | 8,958 | ||||||
Other current assets | 1,197 | 1,269 | ||||||
Total current assets | 105,174 | 118,885 | ||||||
Non-current assets: | ||||||||
Property and equipment, net | 7,861 | 7,815 | ||||||
Operating lease right-of-use assets | 16,769 | 14,016 | ||||||
Capitalized software development, net | 13,499 | 10,179 | ||||||
Goodwill | 99,175 | 99,175 | ||||||
Intangible assets, net | — | 417 | ||||||
Deferred income tax assets, net | 25,969 | 25,826 | ||||||
Other non-current assets | 792 | 978 | ||||||
Total non-current assets | 164,065 | 158,406 | ||||||
Total assets | $ | 269,239 | $ | 277,291 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 4,166 | $ | 6,685 | ||||
Accrued compensation and benefits | 12,621 | 14,103 | ||||||
Deferred revenue | 25,598 | 27,686 | ||||||
Operating lease liabilities | 5,825 | 5,264 | ||||||
Other current liabilities | 4,305 | 3,702 | ||||||
Total current liabilities | 52,515 | 57,440 | ||||||
Non-current liabilities: | ||||||||
Asset retirement obligations | 7,465 | 7,289 | ||||||
Operating lease liabilities | 12,211 | 9,456 | ||||||
Other non-current liabilities | 2,044 | 2,493 | ||||||
Total non-current liabilities | 21,720 | 19,238 | ||||||
Total liabilities | 74,235 | 76,678 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock | $ | — | $ | — | ||||
Common stock | 2 | 2 | ||||||
Additional paid-in capital | 94,276 | 91,780 | ||||||
Accumulated other comprehensive loss | (1,435) | (1,452) | ||||||
Retained earnings | 102,161 | 110,283 | ||||||
Total stockholders’ equity | 195,004 | 200,613 | ||||||
Total liabilities and stockholders’ equity | $ | 269,239 | $ | 277,291 | ||||
(a) Slight variations in totals are due to rounding. | ||||||||
SPOK HOLDINGS, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a) | |||||||
(Unaudited and in thousands) | |||||||
For the six months ended | |||||||
6/30/2021 | 6/30/2020 | ||||||
Operating activities: | |||||||
Net loss | $ | (3,016) | $ | (780) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation, amortization and accretion | 5,184 | 4,218 | |||||
Deferred income tax (benefit) expense | (291) | 290 | |||||
Stock-based compensation | 4,020 | 2,544 | |||||
Provisions for doubtful accounts, service credits and other | 657 | 673 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 1,775 | (670) | |||||
Prepaid expenses and other assets | 994 | 475 | |||||
Net operating lease liabilities | 563 | (60) | |||||
Accounts payable, accrued liabilities and other | (3,538) | 1,142 | |||||
Deferred revenue | (2,482) | (1,373) | |||||
Net cash provided by operating activities | 3,866 | 6,459 | |||||
Investing activities: | |||||||
Purchases of property and equipment | (2,198) | (1,895) | |||||
Capitalized software development | (5,618) | (5,300) | |||||
Purchase of short-term investments | (29,993) | (29,877) | |||||
Maturity of short-term investments | 30,000 | 30,000 | |||||
Net cash used in investing activities | (7,809) | (7,072) | |||||
Financing activities: | |||||||
Cash distributions to stockholders | (5,152) | (5,008) | |||||
Proceeds from issuance of common stock under the Employee Stock Purchase Plan | 132 | 166 | |||||
Purchase of common stock for tax withholding on vested equity awards | (1,656) | (903) | |||||
Net cash used in financing activities | (6,676) | (5,745) | |||||
Effect of exchange rate on cash | 17 | (117) | |||||
Net decrease in cash and cash equivalents | (10,602) | (6,475) | |||||
Cash and cash equivalents, beginning of period | 48,729 | 47,361 | |||||
Cash and cash equivalents, end of period | $ | 38,127 | $ | 40,886 | |||
Supplemental disclosure: | |||||||
Income taxes (refunds received) paid | $ | (42) | $ | 148 | |||
(a) Slight variations in totals are due to rounding. | |||||||
SPOK HOLDINGS, INC. | ||||||||||||||||||||||||||||||||
CONSOLIDATED REVENUE | ||||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION (a) | ||||||||||||||||||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||||||||
6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | |||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||
Paging | $ | 19,135 | $ | 19,353 | $ | 19,513 | $ | 19,961 | $ | 19,990 | $ | 20,451 | $ | 20,826 | $ | 21,212 | ||||||||||||||||
Non-paging | $ | 724 | $ | 767 | $ | 787 | $ | 867 | $ | 1,088 | $ | 935 | $ | 789 | $ | 602 | ||||||||||||||||
Total wireless revenue | $ | 19,859 | $ | 20,120 | $ | 20,300 | $ | 20,828 | $ | 21,078 | $ | 21,386 | $ | 21,615 | $ | 21,814 | ||||||||||||||||
License | $ | 818 | $ | 1,507 | $ | 1,486 | $ | 1,988 | $ | 749 | $ | 955 | $ | 1,711 | $ | 2,723 | ||||||||||||||||
Services | $ | 4,865 | $ | 4,354 | $ | 4,778 | $ | 4,772 | $ | 3,812 | $ | 4,549 | $ | 4,947 | $ | 4,202 | ||||||||||||||||
Equipment | $ | 482 | $ | 616 | $ | 961 | $ | 554 | $ | 601 | $ | 725 | $ | 1,125 | $ | 689 | ||||||||||||||||
Subscription | $ | 90 | $ | 45 | $ | 42 | $ | 24 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Operations revenue | $ | 6,255 | $ | 6,522 | $ | 7,267 | $ | 7,338 | $ | 5,162 | $ | 6,229 | $ | 7,783 | $ | 7,614 | ||||||||||||||||
Maintenance revenue | $ | 9,609 | $ | 9,394 | $ | 9,913 | $ | 9,527 | $ | 9,499 | $ | 9,652 | $ | 10,150 | $ | 10,025 | ||||||||||||||||
Total software revenue | $ | 15,864 | $ | 15,916 | $ | 17,180 | $ | 16,865 | $ | 14,661 | $ | 15,881 | $ | 17,933 | $ | 17,639 | ||||||||||||||||
Total revenue | $ | 35,723 | $ | 36,036 | $ | 37,480 | $ | 37,693 | $ | 35,739 | $ | 37,267 | $ | 39,548 | $ | 39,453 | ||||||||||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||||||||||||||||||
SPOK HOLDINGS, INC. | ||||||||||||||||||||||||||||||||
CONSOLIDATED OPERATING EXPENSES | ||||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION (a) | ||||||||||||||||||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||||||||
6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | |||||||||||||||||||||||||
Cost of revenue | ||||||||||||||||||||||||||||||||
Payroll and related | $ | 4,920 | $ | 5,369 | $ | 5,447 | $ | 4,941 | $ | 4,350 | $ | 5,785 | $ | 5,222 | $ | 5,099 | ||||||||||||||||
Cost of sales | 1,427 | 1,251 | 1,740 | 1,064 | 1,098 | 1,940 | 2,278 | 1,567 | ||||||||||||||||||||||||
Stock-based compensation | 285 | 322 | 136 | 148 | 134 | 119 | 42 | 21 | ||||||||||||||||||||||||
Other | 341 | 299 | 510 | 391 | 319 | 420 | 509 | 503 | ||||||||||||||||||||||||
Total cost of revenue | 6,973 | 7,241 | 7,833 | 6,544 | 5,901 | 8,264 | 8,051 | 7,190 | ||||||||||||||||||||||||
Research and development | ||||||||||||||||||||||||||||||||
Payroll and related | 4,333 | 4,475 | 4,358 | 4,147 | 4,115 | 4,761 | 5,056 | 5,083 | ||||||||||||||||||||||||
Outside services | 2,060 | 2,277 | 2,358 | 2,113 | 1,803 | 1,584 | 1,742 | 2,027 | ||||||||||||||||||||||||
Capitalized software development | (2,698) | (2,920) | (3,046) | (2,906) | (3,596) | (1,705) | — | — | ||||||||||||||||||||||||
Stock-based compensation | 305 | 475 | 246 | 240 | 243 | 236 | 113 | 102 | ||||||||||||||||||||||||
Other | 278 | 199 | 250 | (135) | 189 | 573 | 221 | 225 | ||||||||||||||||||||||||
Total research and development | 4,278 | 4,506 | 4,166 | 3,459 | 2,754 | 5,449 | 7,132 | 7,437 | ||||||||||||||||||||||||
Technology operations | ||||||||||||||||||||||||||||||||
Payroll and related | 2,323 | 2,467 | 2,467 | 2,246 | 2,213 | 2,712 | 2,656 | 2,823 | ||||||||||||||||||||||||
Site rent | 3,143 | 3,196 | 3,313 | 3,467 | 3,399 | 3,398 | 3,669 | 3,269 | ||||||||||||||||||||||||
Telecommunications | 825 | 837 | 857 | 949 | 961 | 1,001 | 1,026 | 1,016 | ||||||||||||||||||||||||
Stock-based compensation | 131 | 137 | 48 | 52 | 47 | 43 | 32 | 30 | ||||||||||||||||||||||||
Other | 665 | 615 | 686 | 643 | 592 | 750 | 700 | 667 | ||||||||||||||||||||||||
Total technology operations | 7,087 | 7,252 | 7,371 | 7,357 | 7,212 | 7,904 | 8,083 | 7,805 | ||||||||||||||||||||||||
Selling and marketing | ||||||||||||||||||||||||||||||||
Payroll and related | 3,161 | 3,135 | 2,912 | 2,773 | 2,538 | 3,583 | 3,382 | 3,524 | ||||||||||||||||||||||||
Commissions | 1,244 | 1,105 | 1,178 | 1,059 | 852 | 1,212 | 1,158 | 1,114 | ||||||||||||||||||||||||
Stock-based compensation | 254 | 319 | 192 | 208 | 194 | 172 | 164 | 137 | ||||||||||||||||||||||||
Advertising and events | 247 | 161 | 539 | 151 | 160 | 784 | 1,034 | 703 | ||||||||||||||||||||||||
Other | 74 | 180 | 183 | 81 | 87 | 610 | 153 | 117 | ||||||||||||||||||||||||
Total selling and marketing | 4,980 | 4,900 | 5,004 | 4,272 | 3,831 | 6,361 | 5,891 | 5,595 | ||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||||||||
Payroll and related | 3,564 | 3,818 | 3,373 | 3,476 | 3,355 | 4,134 | 3,974 | 4,220 | ||||||||||||||||||||||||
Stock-based compensation | 806 | 986 | 726 | 968 | 744 | 612 | 770 | 674 | ||||||||||||||||||||||||
Facility rent, office, and technology costs | 2,484 | 2,480 | 2,412 | 178 | 628 | 43 | 56 | 402 | ||||||||||||||||||||||||
Outside services | 2,219 | 1,825 | 1,584 | 2,259 | 2,276 | 2,068 | 1,952 | 2,369 | ||||||||||||||||||||||||
Taxes, licenses and permits | 1,117 | 1,081 | 484 | 2,148 | 2,043 | 2,036 | 2,350 | 2,004 | ||||||||||||||||||||||||
Bad debt | 328 | 106 | 202 | 994 | 804 | 859 | 1,000 | 888 | ||||||||||||||||||||||||
Other | 1,039 | 854 | 1,265 | 971 | 960 | 1,499 | 1,429 | 1,256 | ||||||||||||||||||||||||
Total general and administrative | 11,557 | 11,150 | 10,046 | 10,994 | 10,810 | 11,251 | 11,531 | 11,813 | ||||||||||||||||||||||||
Depreciation, amortization and accretion | 2,457 | 2,727 | 2,503 | 2,335 | 2,072 | 2,146 | 2,250 | 2,305 | ||||||||||||||||||||||||
Goodwill impairment | — | — | 25,007 | — | — | — | 8,849 | — | ||||||||||||||||||||||||
Operating expenses | $ | 37,332 | $ | 37,776 | $ | 61,930 | $ | 34,961 | $ | 32,580 | $ | 41,375 | $ | 51,787 | $ | 42,145 | ||||||||||||||||
Capital expenditures | $ | 1,480 | $ | 727 | $ | 638 | $ | 934 | $ | 846 | $ | 1,063 | $ | 679 | $ | 1,378 | ||||||||||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||||||||||||||||||
SPOK HOLDINGS, INC. | ||||||||||||||||||||||||||||||||
UNITS IN SERVICE ACTIVITY, MARKET SEGMENT, CHURN | ||||||||||||||||||||||||||||||||
AND AVERAGE REVENUE PER UNIT (ARPU) (a) | ||||||||||||||||||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||||||||
6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | |||||||||||||||||||||||||
Paging units in service | ||||||||||||||||||||||||||||||||
Beginning units in service (000’s) | 874 | 885 | 898 | 915 | 926 | 938 | 955 | 977 | ||||||||||||||||||||||||
Gross placements | 31 | 20 | 20 | 25 | 35 | 24 | 22 | 28 | ||||||||||||||||||||||||
Gross disconnects | (36) | (31) | (33) | (42) | (46) | (36) | (39) | (50) | ||||||||||||||||||||||||
Net change | (5) | (11) | (13) | (17) | (11) | (12) | (17) | (22) | ||||||||||||||||||||||||
Ending units in service | 869 | 874 | 885 | 898 | 915 | 926 | 938 | 955 | ||||||||||||||||||||||||
End of period units in service % of total (b) | ||||||||||||||||||||||||||||||||
Healthcare | 84.5 | % | 84.1 | % | 83.6 | % | 83.7 | % | 83.6 | % | 82.6 | % | 82.4 | % | 81.7 | % | ||||||||||||||||
Government | 4.9 | % | 4.8 | % | 5.3 | % | 5.3 | % | 5.5 | % | 5.4 | % | 5.4 | % | 5.5 | % | ||||||||||||||||
Large enterprise | 4.1 | % | 4.3 | % | 4.3 | % | 4.3 | % | 4.4 | % | 5.5 | % | 5.5 | % | 6.1 | % | ||||||||||||||||
Other(b) | 6.4 | % | 6.8 | % | 6.8 | % | 6.6 | % | 6.6 | % | 6.5 | % | 6.6 | % | 6.7 | % | ||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||
Account size ending units in service (000’s) | ||||||||||||||||||||||||||||||||
1 to 100 units | 58 | 59 | 61 | 63 | 65 | 67 | 69 | 72 | ||||||||||||||||||||||||
101 to 1,000 units | 155 | 163 | 167 | 167 | 165 | 171 | 173 | 175 | ||||||||||||||||||||||||
>1,000 units | 656 | 652 | 657 | 668 | 685 | 688 | 696 | 708 | ||||||||||||||||||||||||
Total | 869 | 874 | 885 | 898 | 915 | 926 | 938 | 955 | ||||||||||||||||||||||||
Account size net loss rate(c) | ||||||||||||||||||||||||||||||||
1 to 100 units | (1.7) | % | (3.3) | % | (3.2) | % | (2.9) | % | (3.1) | % | (3.0) | % | (3.8) | % | (2.1) | % | ||||||||||||||||
101 to 1,000 units | (4.9) | % | (2.4) | % | — | % | 1.5 | % | (4.2) | % | (1.0) | % | (1.0) | % | (2.4) | % | ||||||||||||||||
>1,000 units | 0.6 | % | (0.8) | % | (1.6) | % | (2.5) | % | (0.4) | % | (1.2) | % | (1.8) | % | (2.2) | % | ||||||||||||||||
Total | (0.6) | % | (1.2) | % | (1.4) | % | (1.9) | % | (1.3) | % | (1.3) | % | (1.8) | % | (2.2) | % | ||||||||||||||||
Account size ARPU | ||||||||||||||||||||||||||||||||
1 to 100 units | $ | 11.69 | $ | 11.72 | $ | 11.62 | $ | 11.80 | $ | 11.65 | $ | 12.01 | $ | 11.99 | $ | 11.84 | ||||||||||||||||
101 to 1,000 units | 8.35 | 8.33 | 8.35 | 8.37 | 8.24 | 8.34 | 8.31 | 8.41 | ||||||||||||||||||||||||
>1,000 units | 6.68 | 6.68 | 6.62 | 6.67 | 6.57 | 6.59 | 6.62 | 6.59 | ||||||||||||||||||||||||
Total | $ | 7.32 | $ | 7.34 | $ | 7.30 | $ | 7.34 | $ | 7.24 | $ | 7.31 | $ | 7.33 | $ | 7.32 | ||||||||||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||||||||||||||||||
(b) Other includes hospitality, resort and indirect units | ||||||||||||||||||||||||||||||||
(c) Net loss rate is net current period placements and disconnected units in service divided by prior period ending units in service. | ||||||||||||||||||||||||||||||||
SPOK HOLDINGS, INC. | ||||||||||||||||
RECONCILIATION OF NET (LOSS) INCOME TO EBITDA (a) | ||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||
For the three months ended | For the six months ended | |||||||||||||||
6/30/2021 | 6/30/2020 | 6/30/2021 | 6/30/2020 | |||||||||||||
Net (loss) income | $ | (719) | $ | 3,759 | $ | (3,016) | $ | (780) | ||||||||
Add back: | ||||||||||||||||
(Benefit from) provision for income taxes | (800) | (353) | (209) | 304 | ||||||||||||
Other (income) expenses | (29) | (101) | (2) | 37 | ||||||||||||
Interest income | (61) | (146) | (122) | (509) | ||||||||||||
Operating (loss) income | (1,609) | 3,159 | (3,349) | (948) | ||||||||||||
Depreciation, amortization and accretion | 2,457 | 2,072 | 5,184 | 4,218 | ||||||||||||
EBITDA | $ | 848 | $ | 5,231 | $ | 1,835 | $ | 3,270 | ||||||||
Capitalized software development costs | (2,698) | (3,596) | (5,618) | (5,300) | ||||||||||||
Stock-based compensation | 1,781 | 1,362 | 4,020 | 2,544 | ||||||||||||
Adjusted EBITDA | $ | (69) | $ | 2,997 | $ | 237 | $ | 514 | ||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||
RECONCILIATION OF OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (a) | ||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||
For the three months ended | For the six months ended | |||||||||||||||
6/30/2021 | 6/30/2020 | 6/30/2021 | 6/30/2020 | |||||||||||||
Operating expenses | $ | 37,332 | $ | 32,580 | $ | 75,108 | $ | 73,954 | ||||||||
Add back: | ||||||||||||||||
Depreciation, amortization and accretion | (2,457) | (2,072) | (5,184) | (4,218) | ||||||||||||
Capitalized software development costs | 2,698 | 3,596 | 5,618 | 5,300 | ||||||||||||
Adjusted operating expenses | $ | 37,573 | $ | 34,104 | $ | 75,542 | $ | 75,036 | ||||||||
(a) Slight variations in totals are due to rounding. | ||||||||||||||||
(Unaudited and in millions) | |||||||||
Current Guidance | |||||||||
Full Year 2021 | |||||||||
Operating expenses | $ | 149.7 | to | $ | 155.7 | ||||
Add back: | |||||||||
Depreciation, amortization and accretion | (10.2) | (10.2) | |||||||
Capitalized software development costs | 11.5 | 11.5 | |||||||
Adjusted operating expenses | $ | 151.0 | $ | 157.0 | |||||