Spok Holdings, Inc. (SPOK) research, news, and more from GeoInvesting

Company description

Thu, 28 Jul 2011 04:00:00 GMT

USA Mobility, Inc., headquartered in Springfield, Virginia, is a comprehensive provider of reliable and affordable wireless communications solutions to the healthcare, government, large enterprise and emergency response sectors. In addition, through its Amcom Software subsidiary, it provides mission critical unified communications solutions for hospitals, contact centers, emergency management, mobile event notification and messaging. As a single-source provider, USA Mobility's focus is on the business-to-business marketplace and supplying wireless connectivity solutions to organizations nationwide. The Company operates the largest one-way paging and advanced two-way paging networks in the United States. USA Mobility also offers mobile voice and data services through Sprint Nextel and T-Mobile, including BlackBerry smartphones and GPS location applications. The Company's product offerings include customized wireless connectivity systems for the healthcare, government and other campus environments. USA Mobility also offers M2M (machine-to-machine) telemetry solutions for numerous applications that include asset tracking, utility meter reading and other remote device monitoring applications on a national scale. For further information visit www.usamobility.com and www.amcomsoftware.com.

Research

Thu, 30 Oct 2025 20:34:49 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($15.81; $325.5M market cap) announced Q3 2025 results:

Q3 sales of $33.8 million vs. $34.8 million in the prior year and missed analyst estimates of $35.9
Q3 EPS: $0.15 vs. $0.18 in the prior year and missed analyst estimates of $0.19

"Spok continues to execute at a high level and we remain confident in our full year financial projections,” said Vincent D. Kelly, chief executive officer of Spok Holdings, Inc. “Our focus is to generate cash flow and return capital to stockholders, while responsibly investing for future growth. On a year-to-date basis, we have done and will continue to do so. We also continue to make progress in key performance areas, including net income and cash generation, wireless ARPU trends, software revenue growth and backlog levels. We were able to accomplish this while continuing to invest in our Spok Care Connect and Wireless solutions. Through the first nine months of the year, we have invested more than $9 million in our world-class product platform and believe that these investments will create shareholder value into the future.

"Based on our performance in the first nine months of 2025, and our visibility into our very robust product sales pipeline, we are reiterating our full year 2025 guidance estimates for revenue and adjusted EBITDA”

Revenue: $138M–$143.5M
Adjusted EBITDA: $28.5M–$32.5M

With the $1.25 yearly dividend shares should have downside protection. (currently an 8% yield)

Spok Holdings, Inc. provides healthcare communication solutions, including clinical messaging software, paging services, and related support tools that enhance workflows, patient care, and administrative compliance.

Research

Thu, 31 Jul 2025 04:00:00 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($17.03; $350.4M market cap) announced Q2 2025 results:

Q2 sales of $35.7 million vs. $34.0 million in the prior year and beat analyst estimates of $35.0
Q2 EPS: $0.22 vs. $0.17 in the prior year and beat analyst estimates of $0.18

Noteworthy Disclosures:

Quarterly dividend of $0.3125 per share, payable September 9, 2025
Software operations bookings: $11.7 million (up 34% YoY), including 23 six-figure and 1 seven-figure contract
Software backlog: $65.2 million (up 19% YoY)
Wireless ARPU: $8.20 (up 5% YoY)
Capital returned to stockholders: $6.5 million
No debt; $20.2 million in cash as of June 30, 2025
Increased 2025 revenue and adjusted EBITDA guidance:
- Revenue: $138M–$143.5M (prior: $134M–$142M)
- Adjusted EBITDA: $28.5M–$32.5M (prior: $27.5M–$32.5M)

Management Commentary:

“I am proud of the strong performance our team was able to deliver in the second quarter and believe these results provide solid momentum for the balance of 2025... In fact, the $11.7 million of software operations bookings in the second quarter of 2025, combined with a strong backlog, drove a 10% increase in software revenue that included double-digit growth in license revenue and triple-digit growth in managed services revenue...” – Vincent D. Kelly, CEO

“In the second quarter, we generated nearly $4.6 million of net income and nearly $7.5 million of adjusted EBITDA, while continuing to invest in the development of our products... All else remaining equal, we expect cash balances to continue to grow through the remainder of the year.”

“We are increasing our full year 2025 guidance estimates for revenue and adjusted EBITDA. At the midpoint... we would grow consolidated revenue... with an expected 6.4% growth in software revenue... We also anticipate that the midpoint of our adjusted EBITDA guidance will be up from last year, with growth potential at the high-end... of more than 11%.”

Research

Thu, 01 May 2025 15:40:55 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($14.34; $292.8M market cap) announced Q1 2025 results:

Q1 sales of $36.3 million vs. $34.9 million in the prior year
Q1 EPS of $0.25 vs.$0.21 in the prior year

Management Commentary:

"I am proud of the strong performance our team was able to deliver in the first quarter and believe these results provide solid momentum as we kick-off 2025,” said Vincent D. Kelly, chief executive officer of Spok Holdings, Inc. “Spok continues to execute on generating cash flow and returning capital to stockholders, while responsibly investing for future growth…

…Consistent with prior years, our cash balances declined in the first quarter because of typical working capital needs. However, we anticipate cash balances will generally grow through the remainder of the year, given that those needs are behind us.

We were very pleased with our performance in the first quarter and believe that it provides a solid springboard for 2025. However, I'd like to address the current uncertainty in the macro environment around tariffs and its impact on the healthcare industry, and Spok in particular. Based on the current landscape, we believe that neither our revenue nor our supply chain will be materially impacted. Additionally, Spok's products and solutions are viewed as an essential utility within the walls of our hospital customers. For those reasons, and coupled with our first quarter performance, we feel comfortable reiterating our financial guidance for the year. Of course, we will continue to update you on our outlook each quarter when we report our results,"

Conference call InfoArb:

During the conference call Q&A, management indicated that Q2 is looking pretty good, here is the exchange from the call:

Question – Anderson Schock: Hey. Thanks for taking the questions and congratulations on a really strong quarter. So first, you signed 22 six-figure customer contracts in the first quarter. I guess, is there any seasonality with the larger seven-figure contracts that we should be thinking about? I know you signed seven in the fourth quarter last year.

Answer – Vincent D. Kelly: You know, there's really not -- we've noticed a good trend so far this year. We signed more in March than we signed in February than we signed in January. So it's certainly been trending in the right direction. And so far in the second quarter, it's looking pretty good too. So no seasonality. We've not seen any type of, you know, tariff related or economic slowdown related pressure on our customers. They're -- they're buying at a healthy rate.

SPOK is a comprehensive provider of wireless communications and software solutions to the healthcare, government, large enterprise and emergency response sectors.

Research

Thu, 27 Feb 2025 15:29:29 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($16.54, $335.3 M market cap) reported Q4 and full year 2024 financial results:

Revenue of $33.8 million vs.$33.9 million in the prior year and missed analyst estimate of $35.7 million
Non-GAAP EPS for $0.24 vs. $0.22 in the prior year and ahead of analyst EPS estimate of $0.21

"Based on our performance in 2024, and the numerous financial and operational milestones we achieved during the year, we are providing 2025 guidance estimates for revenue and adjusted EBITDA. This guidance reflects the team's confidence in being able to outpace our last year's performance. At the midpoint of the guidance range, we believe we are on track to again grow consolidated revenue in 2025, on a year-over-year basis, with continued growth in software revenue, partially offset with slight declines in wireless revenue. We also anticipate that the midpoint of our adjusted EBITDA guidance will be consistent with last year, with additional growth potential at the high-end of the guidance range. Of course, we will continue to update you on our outlook each quarter when we report our results,"

2025 guidance for sales of $134 to $142 million, analyst estimates are for $140.7 million and adjusted EBITDA of $27.5 vs $32.5 million.

SPOK is a comprehensive provider of wireless communications solutions to the healthcare, government, large enterprise and emergency response sectors.

Call to Action

Thu, 14 Nov 2024 05:00:00 GMT

Portfolio Action: Removing SPOK from the Fave 5 Model Portfolio

Closing from the Top Five Favorites Model Portfolio at 16.76 with a final return of 104.63% and high return of 121.48%.

Until SPOK can prove that it can grow its software revenue, the story now entirely revolves around the stock being a dividend play. When we first started writing about the stock, the story was an earnings growth plus dividend play. At that time, the dividend yield was around 15%. Now, after the stock has risen, the yield is currently sitting at around 7.5%. We do believe the stock could eventually trade at a 5% dividend yield, which implies a stock price of around $25. Further upside exists if the company raises the dividend payout, which we don’t think is entirely out of question at some point. We also still believe the stock is a strong acquisition target.

Research

Thu, 31 Oct 2024 16:19:56 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($16.46, $333.4 M market cap) reported Q3 2024 financial results:

Revenue of $34.8 million vs.$35.4 million in the prior year and inline with analyst estimate of $34.7 million
Non-GAAP EPS for $0.18 vs. $0.22 in the prior year and ahead of analyst EPS estimate of $0.17

Management comments:

“We continue to achieve our goal to consistently generate cash flow in order to return capital to our loyal stockholders over the long term. I am particularly pleased with our performance in generating both sequential and year-over-year growth in software operations bookings."

"I believe Spok is doing an excellent job of balancing the necessary investments in our products and infrastructure in order to fuel future growth, while continuing to return capital to our stockholders,"

Maintained full year 2024 guidance:

Total sales to be between $136 to $144 million, in line with analyst estimates of $139.0 million
Adjusted EBITDA guidance to be $27.5 to $32.5 million, in line with analyst estimates of $30.0 million

Excerpt from conference call ensuring dividend safety and strength for Q4 and 2025:

“We have enhanced our paging platform and brought new modern secure user devices to market in order to serve our core healthcare customer base. We believe with these two assets going for us we can continue to pay our recurring dividend for the foreseeable future. And our best financial results are ahead of us.”

“We continue to serve our customers at a high level and position Spok for strong performance in the fourth quarter and throughout 2025.”

SPOK is a comprehensive provider of wireless communications solutions to the healthcare, government, large enterprise and emergency response sectors.

Research

Thu, 25 Jul 2024 14:34:54 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($16.46, $333.4 M market cap) reported Q2 2024 financial results:

Non-GAAP EPS for Q2 2024: $0.17 vs. $0.23 in Q2 2023 vs. estimate of $0.17
Revenue of $34.0 million,vs. $36.5 million in Q2 2023 vs. estimate of $34.31 million
Declared a regular quarterly dividend of $0.3125 per share

"I believe Spok is doing an excellent job of balancing the necessary investments in our products and infrastructure in order to fuel future growth and continuing to return capital to our stockholders," continued Kelly. "Through the first six months of this year, Spok has generated nearly $7.7 million of net income and $14.6 million of adjusted EBITDA. Adjusted EBITDA in the second quarter was more than enough to cover our quarterly dividend payment, as well as our capital expenditure requirements. This resulted in a slight increase in our cash and cash equivalents balance, which we believe will continue to build through the remainder of the year.

"We were very pleased with our performance in the second quarter and believe that our results in the first half of the year provide a solid springboard for the second half of 2024. As a result, we are reiterating our guidance estimates for revenue and adjusted EBITDA generation for this year. At the midpoint of that guidance range, we believe we are on track to again grow consolidated revenue in 2024, on a year-over-year basis, with slight declines in wireless revenue being more than offset by continued growth in software revenue. We also anticipate that the midpoint of our adjusted EBITDA guidance will be consistent with 2023, with additional growth potential at the high-end of the guidance range. Of course, we will continue to update you on our outlook each quarter when we report our results," concluded Kelly.

A key milestone for we are monitoring is if and when SPOK will be able to cover its entire dividend from cash flow, which this passage from the earnings call addresses:

“We also take this opportunity right up front to remind everyone that our mission remains solidly unchanged. That is to generate cash and return capital to our shareholders over the long term while responsibly investing in and growing our business.

As we've demonstrated through our performance since our strategic pivot more than two years ago, we believe we are on a sustainable path to doing so and that our cash flow is on a path to grow into our current dividend level and cover it in full on an annual basis. That is our primary focus. Returning capital to shareholders is our legacy and we feel good about executing a strategy we believe in and that we've had a lot of success with historically.”

The call also disclosed:

“Yeah. We have a couple of very large GenA pager sale deals queuing up here for the third quarter and the fourth quarter too and that will have a positive impact on ARPU as well.”

SPOK is a comprehensive provider of wireless communications solutions to the healthcare, government, large enterprise and emergency response sectors.

–

Research

Thu, 02 May 2024 14:52:28 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($15.72; $316.5M market cap) announced its Q1 2024 results:

Q1 sales of $34.9 million vs $33.1 million in the prior year; in line with analyst estimates of $34.8 million
Non-GAAP EPS of $0.26 vs $0.20 in the prior year and in line with analyst estimates of $0.26

"We were very pleased with our performance in the first quarter and believe that it provides a solid springboard for 2024. As a result, we are reiterating our guidance estimates for revenue and adjusted EBITDA generation for this year. At the midpoint of that guidance range, we believe we are on track to again grow consolidated revenue in 2024, on a year-over-year basis, with slight declines in wireless revenue being more than offset by continued growth in software revenue. We also anticipate that the midpoint of our adjusted EBITDA guidance will be consistent with 2023, with additional growth potential at the high-end of the guidance range. Of course, we will continue to update you on our outlook each quarter when we report our results,"

Maintained full year 2024 guidance:

Total sales to be between $136 to $144 million, in line with analyst estimates of $139.8 million
Adjusted EBITDA guidance to be $27.5 to $32.5 million, in line with analyst estimates of $30.0 million

SPOK is a comprehensive provider of wireless communications solutions to the healthcare, government, large enterprise and emergency response sectors.

Research

Mon, 22 Apr 2024 14:02:13 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($15.01; $302.2M market cap) - As we go through our conference call reviews ahead of Q1 reports, we wanted to share a quote from SPOK that indicates Q1 should be strong and could lead to them to raise guidance which they have done a number of times last year.

“For example, some of the contracts we anticipated to close in the fourth quarter of 2023 were postponed to the beginning of the year and consequently 2024 has started out extremely strong. In fact, January was a company record and February has been strong as well. So we did not spend a great deal of time analyzing the sales performance of an individual month or quarter as opposed to viewing bookings in the broader context of our pipeline execution and anticipated annual results. We expect 2024 operations bookings to grow well above our 2023 levels.”

Management also stated:

“Of course, like last year, we will review guidance with you on a quarterly basis and make adjustments as appropriate”.

You can see our Q4 earnings release here.

Research

Thu, 22 Feb 2024 19:37:51 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($15.56; $310.9M market cap) announced its Q4 2023 results:

Q4 sales of $33.9 million vs $33.2 million in the prior year; ahead of analyst estimates of $32.7 million
Non-GAAP EPS of $0.24 vs $0.24 in the prior year and ahead of analyst estimates of $0.13
Full year sales of $139.0 million vs $134.5 million in the prior year
Full year non-GAAP EPS of $0.99 vs non-GAAP EPS of $0.59

"In short, I believe Spok has done an excellent job of balancing the necessary investments we needed to make in our products and infrastructure in order to fuel future growth, while continuing to create stockholder value and return capital to our stockholders," continued Kelly. "In 2023, we generated nearly $16 million of net income and more than $30 million of adjusted EBITDA, which more than covered the $25.6 million we returned to our stockholders. However, at the same time, we invested more than $10.5 million in our products and services. We remain committed to this approach and believe our extensive experience operating our established and well-regarded communication solutions will create significant value going forward.”

2024 Guidance:

Total sales to be between $136 to $144 million, in line with analyst estimates of $139.8 million
Adjusted EBITDA guidance to be $27.5 to $32.5 million, in line with analyst estimates of $29.3 million

Throughout tast year, SPOK, a provider of healthcare communication solutions, raised guidance several times, and based on the conference call comments it seems that is very likely to happen again this year.

“In short, we continue to fire on all cylinders and are confident about the future as we start 2024. Based on our performance in 2023, we are providing our guidance estimates for revenue and adjusted EBITDA generation in 2024. This guidance reflects the team's confidence in being able to outpace our 2023 performance.

At the midpoint of the guidance range, we believe we're on track to again grow consolidated revenue in 2024 on a year-over-year basis. We also anticipate that the midpoint of our adjusted EBITDA guidance will be consistent with last year with additional growth potential at the high end of the guidance range. Calvin will go into more detail regarding our expectations later in the call. Of course, like last year, we will review guidance with you on a quarterly basis and make adjustments as appropriate”.

Research

Thu, 26 Oct 2023 14:35:16 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($14.59; $291.3M market cap) provides healthcare communication solutions. The company announced its Q3 2023 results:

Sales of $35.4 million vs $33.7 million in the prior year; ahead of analyst estimates of $33.7 million
GAAP EPS of $0.22 vs GAAP EPS of $0.15 in the prior year and in ahead of analyst estimates of $0.18
Non-GAAP EPS of $0.27 vs $0.25 in the prior year

Management Comment:

“I believe Spok has struck an excellent balance between making the necessary investments to fuel future growth, while continuing to demonstrate our prowess in generating cash and returning capital to our stockholders," continued Kelly. " We look forward to a successful conclusion to the year and believe our extensive experience operating our established communication solutions will create significant value for stockholders.”

Increased full year guidance:

Full year 2023 revenue to be $136.2 to $139.2 million, up from prior guidance of $134.5 to $137.5 million
Adjusted EBITDA to be $27.5 to $29.0 million, up from $25.0 to $28.0 million.

Should be noted that the company increased guidance each quarter this year.

Research

Thu, 27 Jul 2023 17:50:18 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($11.44; $228.2M market cap) provides healthcare communication solutions. The company announced its Q2 2023 results:

Sales of $36.4 million vs $33.7 million in the prior year; ahead of analyst estimates of $33.6 million
GAAP EPS of $0.23 vs GAAP EPSof $0.10 in the prior year and in line with analyst estimates of $0.23
Non-GAAP EPS of $0.28 vs non-GAAP EPS $0.16 in the prior year
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
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.
Big Highlight was the increases in software sales and surprise growth in pager revenue, where attritions has been a concern
The results set up the company well to increase its already juicy dividend, something management has indicated is in the cards in past investors conferences.
Real-Time Highlight from live conference call: “Expect upper teens growth for full year software.”

"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.”

Company raised guidance for second consecutive quarter:

Expects full year revenue to be between $134.5 and $137.5 million vs prior guidance of $131.0 to 137.5
Expects full year adjusted EBITDA to be $25 to $28 million vs prior range of $24.5 to $26.5 million.

We will be on the conference call this morning at 9AM EST to see if any information arbitrage is presented.

Research

Thu, 04 May 2023 14:53:04 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($9.00; $173.3M market cap) provides healthcare communication solutions. The company announced its Q1 2023 results:

Sales of $33.1 million vs $33.8 million in the prior year; ahead of analyst estimates of $32.3 million
Non-GAAP EPS of $0.19 vs non-GAAP loss of $0.16 in the prior year and in line with analyst estimates of $0.19

“Last quarter, we made tremendous progress in several key performance areas, including wireless trends, software bookings and backlog levels, as well as expense management, as we continued to see expense declines on both a sequential and year-over-year basis. We were able to accomplish this while investing in our Spok Care Connect and Wireless solutions. I am particularly pleased with our performance in Wireless, as we grew first quarter revenue on both a sequential and year-over-year basis and further minimized unit churn. More than half of the nearly 5% annual growth in ARPU in the first quarter reflects the impacts of pricing actions taken in late 2022 and, to a lesser extent, sales of our new GenA™ pager. We look forward to continued success in the remainder 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.”

The company increased its guidance range for fiscal 2023:

Sales guidance of $131.0 to $137.5 up from prior guidance of $129.0 to $136.5 million
Adjusted EBITDA guidance of $24.5 to $26.5 million up from prior guidance of $24 to $26 million

The company will be hosting its Q1 2023 conference call at 9:30 AM EST. SPOK is also holding its investor day presentations from 11AM to 3:00 PM. We are registered for both events to see if management gives more color on its return of capital initiatives as well as any longer term outlook

Research

Thu, 23 Feb 2023 05:00:00 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($9.00; $173.3M market cap) provides healthcare communication solutions. The company announced its Q4 2022 results:

Sales of $33.2 million vs $34.5 million in the prior year; ahead of analyst estimates of $32.5 million
Non-GAAP EPS of $0.24 vs non-GAAP loss of $0.10 in the prior year

Management commented on the progress the company made in 2022:

"I am proud of what the Spok team has been able to accomplish in 2022 and believe that we have established a solid foundation for the future as we continue to execute our focus on generating cash flow and returning capital to stockholders,” said Vincent D. Kelly, chief executive officer of Spok Holdings, Inc. “Last year, we made progress in several key performance areas, including wireless trends, software bookings and backlog levels, as well as expense management, as we aligned our cost structure with our business plan. In 2023 we will continue to invest in a targeted and limited manner in our Spok Care Connect solutions and leverage the traction that our sales team generated through the 66 six figure new customer contracts booked last year and the growth in our sales pipeline. Spok will also take advantage of new wireless technologies, such as our GenA™ pager, to further minimize unit churn and support average revenue per unit. Going forward, we believe our extensive experience operating our established communication solutions will create significant value for stockholders by maximizing revenue and cash flow generation.”

The earnings report largely confirms the positive trends outlined in our report we published yesterday, especially regarding reducing churn in the pager business and momentum building in the software business, as evidenced by increased bookings.

More importantly, the 2022 adjusted EBITDA and 2023 adjusted EBITDA guidance begin to paint a picture that the company’s high dividend can be maintained, without a significant dependence on its cash balance, leaving room for the company to invest capital into growth initiatives.

2023 Guidance:

Revenue guidance of $129.0 to $136.5 vs. analyst estimates of $131.3 million
EBITDA guidance of $24 to $26 million vs. analyst estimates of $18.6 million

We will be on the call this morning at 8:30 AM to see if management provides any information arbitrage.

As a reminder, we have a Fireside Chat coming up with company management next week, so please further familiarize yourself with the story by reading our new article here which we published yesterday.

–

Research

Thu, 02 Feb 2023 15:21:20 GMT

Spok Holdings, Inc. (NASDAQ:SPOK) ($8.32; $163.9M market cap) provides healthcare communication solutions. On January 31, 2023 SPOK presented at the Lytham Partners Conference. A webcast of the presentation can be found here. We encourage anyone who is interested in the story to watch the webcast for a detailed walkthrough of the business by the CEO and COO.

Our 4 main takeaways from the call:

With no debt, and strong cash flow from operations, the hefty dividend seems very safe.
Deceleration of pager business should be mitigated, as growth initiatives are in place for the software side of business.
Strong visibility, given that over 80% of revenue is recurring revenue.
In his closing summary, around the 26 min mark, the CEO seems to imply the company will beat guidance.

Recall that on January 3, 2023 we added SPOK to our top 5 model portfolio. That update can be found here.

Research

Tue, 03 Jan 2023 15:38:02 GMT

Added SPOK To Top 5 Favorite Model Portfolio

Spok Holdings, Inc. (NASDAQ:SPOK) ($8.19; $161.3M market cap) provides healthcare communication solutions. On October 31, 2022 we highlighted SPOK as a stock many may be overlooking due to its failed attempt with an acquisition and the inability to grow revenues and show profits.

We cover the changes that the Company has gone through, and why we feel the stock is very attractive including:

SPOK is the leader in its industry.
Strong balance sheet
Return to profitability
Focus on revenue growth
High dividend yield of over 12%.
The company already received two acquisition offers at well above the current stock price
Over 80% of the company’s revenue is recurring.
Activists have invested in the company and are working to keep the management team in “check.”
If you're into options, they are available, and very playable without a high premium.
The stock is selling at a cheap valuation because management’s growth initiatives have yet to be fully reflected in the financial results of the company. We predict investors will get to see the tangible effects of the company’s efforts once the fourth quarter earnings report is published.
Management has just started buying the stock on the open market.
A comparable company, Vocera Communications, Inc. (NYSE:VCRA), was recently acquired at 13x sales; SPOK currently trades at 1x sales, which suggests it’s trading at a significant discount to fair value. It also suggests that it is a potential prime acquisition target, given that they are the leader in their industry.

You can see CliffsNotes from MS Microcaps here, a PodClip from November 2022 with SPOK summary here, and the video clip from our recent Open FOrum where Maj discusses the company here.

PodClips

Fri, 18 Nov 2022 05:00:00 GMT

11-18-2022 SPOK PodClip - Update After Pre Qualification Interview w/Mgmt

Research

Mon, 31 Oct 2022 12:27:24 GMT

When Others Hate Your Stock

My analyst team at MSM thinks it may have found what will be a classic successful ‘Big Cap Microcap’ (BigCapMicro) case study in a company that provides healthcare communication solutions internationally, delivering clinical information to care teams to enhance patient outcomes (clinical communication technology to hospitals). MSM Published its CliffsNotes on Spok Holdings, Inc. (NASDAQ:SPOK) last week, as mentioned in a Premium Tweet announcing the availability of the notes.

I am currently long the stock via call options.

The company has two divisions, wireless (traditional paging) and related software services (Spok Care Connect) to manage the flow, delivery and analysis of communication. Some of its services include subscriptions to one-way or two-way messaging, voicemail services, call center services, equipment loss or maintenance protection, and selling devices to resellers who lease or resell them to their subscribers.

“The Spok Care Connect platform is composed of three primary solutions which drive our value proposition up, improving patient outcomes by connecting clinical teams with the people and information they need when and where it matters most. First, with respect to patient customer relationship management, our contact center consoles enable agents to connect staff and external callers in a fast, reliable, and professional manner, providing best-in-class service to care teams, patients, and their families.

Second, efficient clinical workflows help drive the complex work of care teams, and Spok Care Connect helps care teams streamline them through smart alarm management and notification systems.

Finally, patient-focused care team collaboration provides secure mobile and web messaging for fast and reliable care team communication.”

I presented the idea of the BigCapMicro concept via case studies in a 2017 article, Microcap Stocks with Big Cap Appeal, showcasing microcap stocks that produce large cap revenues, resulting in sometimes explosive stock price increases. It compliments the subject matter of this article, so we hope you can take a look at that quick read to gain a little more context.

The last time I came across a hated BigCapMicro name was Bluelinx Holdings Inc. (NYSE:BXC), a $1.0 billion revenue lumber product supply company highlighted on GeoInvesting that was being priced for bankruptcy. Investors were tired of hearing about the turnaround. Well, the stock went on for a magical run from around $10 to $100, even rising over $30 in one day during its run��‍♂️.

Part of the essence of our Tier One Microcap selection process starts with finding older companies sitting around doing nothing or disappointing investors. Then change comes along that leads to a breakout from a multi-year growth rut, so to speak. It’s easy to overlook or even “hate” companies viewed as being run by management with a dreaded “status-quo-is-good-enough” attitude who don’t regularly make the necessary operational adjustments to reward shareholders.

Spok Holdings, Inc. was founded in 1986, and is by no means one of the oldest companies highlighted on GeoInvesting. However, even though the company has been generating revenue well in excess of $100 million, as MSM has pointed out, investors have likely handed out some demerits due to:

A failed attempt to exact change through the acquisition of a communication software company in 2011 that was draining cash flow.
It’s inability to maintain profitability as evidenced by reporting negative GAAP net income numbers on an annual basis since 2017.
Management’s inability to grow revenues to offset a slow, but unstoppable churn of its old school wireless paging solutions business (although churn is slowing).

And who knows what other “skeletons” we’ll find as we continue to dig!?

Basically, many investors who have a history with the company, including some I have communicated with, want nothing to do with it. For example, institutional ownership has gradually decreased over the last 8 years, from 86% in 2014 to 66% today.

This could help set the stage for a flurry of large buyers to enter the stock should a successful turnaround take hold. And things are looking interesting from a profitability standpoint. The company reported two consecutive quarters of strong profitability, with a total adjusted EPS of $0.34 during Q2 and Q3. Shares are trading at a meager run-rate P/E of 12X and throwing off a sustainable dividend yield of 15%.

What we have here is a simple scenario, where SPOK’s story appears much brighter and safer than it has been in years, with a risk premium that is way too high as inferred by the dividend yield. The yield must come down substantially (via an increase in stock price) to rectify this disconnect.

So, what happened to make SPOK to make it worth looking into?

Change

In February 2022, SPOK succumbed to earlier pressure from Acacia Research and its activist partner, Starboard Value Hedge Fund, by enacting restructuring moves, including raising its dividend, selling the losing acquired software biz (SPOK-GO), a $10 million stock buyback program and expense cuts,

“Over the past three quarters, Spok has generated $16.9 million of pro forma free cash flow, and has returned $18.8 million in cumulative capital to shareholders since the implementation of the strategic business plan.”

With SPOK-GO no longer a burden, the company is now looking for ways to grow its revenue. For example, pertaining to its software revenue, the company holds leading market share positions in the mid and large tier hospital market, but a meager 5% share in the small hospital market which it can target for growth:

“For our software-only market share by bed size, we currently have 287 or 5% of hospitals with one to 199 beds, we have 388 customers or 30% of the market for hospitals with 200 to 599 beds, and we currently have 156 customers or 50% of the market for hospitals with 600 beds or more. And although we have a dominant market share of large hospitals with 600 beds or more, we are currently working on new and innovative ways to serve small mid-sized hospitals with a hosted model from our Plano data center.”

Moving back to the juicy dividend, they’ve inverted their quarterly dividend from $0.13 in all years prior to 2022, to $0.31 for the first 3 quarters of 2022.

A 15% dividend yield is certainly appealing and even more so if we are looking at substantial increases in EPS that will overshadow this gift, potentially resulting in stock price increases.

Furthermore, what’s not to like about a company slated by analysts to report the highest gross margin trend in the company’s publicly listed history, over 80%?

Here are a few more things to chew on:

SPOK has 80% recurring revenue,
It’s the leader in its industry
It has zero debt

Arguably, the company is in better shape than it was when Acacia Research made a bid for the company at $10.75 in August and B. Riley Financial withdrew its $12.00 2020 bid for the company due to the failure of SPOK’s board to engage. So, could we be in store for a higher bid from a suitor in the near future? Well, what we do know is that management has not taken a sale of the company off the table:

“The Board and its advisors continue to engage with potential acquirers regarding a sale of the Company, including Acacia Research Corporation regarding its offer to acquire the Company. There can be no assurance that the strategic alternatives review process will lead to a transaction or the sale of all or part of the Company.”

So, even if they fail at finding a way to grow revenue, we could have a safety net in terms of the company being acquired. And with insiders only owning about 13% of the stock, we do not think they will be able to put up a good fight to get in the way of an acquirer.

One thing that is interesting to point out is that insiders have more than doubled their ownership in the stock since April, possibly attempting to get into position to fight a hostile takeover. If true, more insider buying could lift shares, which currently sit at 40% higher than their July lows.

Will the haters start to come around?

Looking back, if I would have invested in the company during its period of investor disappointment, I might have never wanted anything to do with the story. I’d have perceived the stock as a loser, stuck in a losing investment, or in the least, in a nonperformer with a $0.13 dividend as a small consolation prize tying up my funds for years.

But luckily, I didn’t, nor was I even aware the company existed. This has allowed me to look at the story with an open mind (half glass full). I’ve talked to several investors who just hate the company, but that’s just fine with me. The more people hate this stock, the more I like it.

If management sentiment gleaned from the company’sQ3 2022 conference call comes true…

“In total, Spok has generated close to $1 billion in cumulative free cash flow since our formation back in 2004, and we're not even close to being done yet, as you've seen from this year, and you will see going forward.” (Source: Sentieo)

…as well as its Q2 2022 conference call:

“We think our stock represents a compelling value and you're going to get paid a very nice yield, while you wait for appreciation, and we think appreciation will be coming.”

…it’s our contention that everyone will soon be loving the name.

PodClips

Sat, 29 Oct 2022 04:00:00 GMT

10-29-2022 SPOK PodClip - Potential BiCapMicro

Comments & Business Outlook

Thu, 27 Oct 2011 04:00:00 GMT

Third Quarter 2011 Results

Total revenue for the third quarter was $61.5 million. Revenue from the Company’s Wireless business (USA Mobility Wireless) was $48.6 million, compared to $52.1 million in the second quarter and $56.7 million in the third quarter of 2010. Revenue from the Software business (Amcom Software) was $12.9 million, compared to $13.1 million in the second quarter. Software maintenance revenue was reduced by $1.5 million for purchase accounting adjustments in the third quarter, compared to a reduction of $2.6 million in the second quarter.
Excluding the purchase accounting adjustments and one-time items, net income for the third quarter of 2011 would have been $11.6 million, or $0.51 per fully diluted share, compared to $14.9 million, or $0.66 per fully diluted share, for the second quarter of 2011 and $13.2 million, or $0.59 per fully diluted share, for the third quarter of 2010.

“Despite a still challenging economy, we again made excellent progress during the quarter in both our Wireless and Software businesses,” said Vincent D. Kelly, president and chief executive officer. “Results either met or exceeded our key performance targets and were consistent with the adjusted financial guidance we revised last quarter. On the Wireless side, we were pleased to see continued improvement in the annual rate of paging subscriber and revenue erosion, while posting record margins. This will be the seventh consecutive year since our formation in late 2004 where we have expanded our operating margins. Additionally, our Software subsidiary, Amcom Software, recorded a strong quarter in a tough economic environment with solid bookings and a growing backlog. In addition, we continued to maintain high operating margins, reduce expenses, pay down debt incurred with the Amcom acquisition, and generate sufficient cash flow to again return capital to stockholders in the form of dividend distributions.”

Regarding financial guidance for 2011, Endsley said the Company is maintaining its prior guidance based on current trends. The Company provides financial guidance (schedule attached) for both the full-year, assuming the acquisition of Amcom Software had occurred on January 1, 2011, and with an adjusted guidance range, which reflects Software’s results from March 3, 2011 (the date of the acquisition) along with the required purchase accounting adjustments to maintenance revenue. As such, Endsley said the Company expects total revenues for 2011 to range from $235 million to $248 million, with Wireless between $193 million and $200 million and Software between $42 million and $48 million; operating expenses (excluding depreciation, amortization and accretion) to range from $162 million to $174 million, with Wireless between $127 million and $134 million and Software between $35 million and $40 million; and capital expenses to range from $6.5 million to $9 million, with Wireless between $6 million and $8 and Software between $0.5 million and $1 million.

Comments & Business Outlook

Thu, 28 Jul 2011 04:00:00 GMT

Second quarter ended June 30, 2011

Total revenue for the second quarter was $65.2 million, including $52.1 million from the Company’s Wireless business (USA Mobility Wireless) and $13.1 million from its Software business (Amcom Software). Software maintenance revenue was reduced by $2.6 million for purchase accounting adjustments. Wireless revenue was $52.1 million compared to $52.5 million in the first quarter and $59.1 million in the second quarter of 2010. Software revenue was $13.1 million compared to $4.8 million in the first quarter, which included results for only the 29-day period from March 3, 2011 to March 31, 2011 and purchase accounting adjustments of $0.9 million.

Second quarter EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) totaled $21.4 million, including $20.4 million from Wireless and $1.0 million from Software. EBITDA from Wireless was $20.4 million compared to $17.0 million in the prior quarter and $20.4 million in the year-earlier quarter. EBITDA from Software was $1.0 million compared to $0.9 million in the first quarter, which reflected results for only the 29-day period ended March 31, 2011. Excluding the purchase accounting adjustments, second quarter EBITDA would have been $24.1 million or 35.5 percent of revenue.

Net income for the second quarter was $18.6 million, or $0.82 per fully diluted share, compared to $13.1 million, or $0.58 per fully diluted share, in the year-earlier quarter. Excluding the purchase accounting adjustments, net income for the second quarter would have been $20.6 million or $0.91 per fully diluted share.

GuidanceCompany expects total revenues for 2011 to range from $235 million to $248 million (versus earlier guidance of $224 million to $240 million)

Comments & Business Outlook

Wed, 27 Jul 2011 04:00:00 GMT

Total revenue for the second quarter was $65.2 million, including $52.1 million from the Company’s Wireless business (USA Mobility Wireless) and $13.1 million from its Software business (Amcom Software). Software maintenance revenue was reduced by $2.6 million for purchase accounting adjustments. Wireless revenue was $52.1 million compared to $52.5 million in the first quarter and $59.1 million in the second quarter of 2010. Software revenue was $13.1 million compared to $4.8 million in the first quarter, which included results for only the 29-day period from March 3, 2011 to March 31, 2011 and purchase accounting adjustments of $0.9 million.

Second quarter EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) totaled $21.4 million, including $20.4 million from Wireless and $1.0 million from Software. EBITDA from Wireless was $20.4 million compared to $17.0 million in the prior quarter and $20.4 million in the year-earlier quarter. EBITDA from Software was $1.0 million compared to $0.9 million in the first quarter, which reflected results for only the 29-day period ended March 31, 2011. Excluding the purchase accounting adjustments, second quarter EBITDA would have been $24.1 million or 35.5 percent of revenue.

Net income for the second quarter was $18.6 million, or $0.82 per fully diluted share, compared to $13.1 million, or $0.58 per fully diluted share, in the year-earlier quarter. Excluding the purchase accounting adjustments, net income for the second quarter would have been $20.6 million or $0.91 per fully diluted share

Regarding financial guidance for 2011, Endsley said the Company revised and improved its prior guidance for the full year based primarily on the strong performance of its Wireless business. In schedules attached to this press release, the full-year adjusted guidance reflects Software’s results for the partial year (March 3 to December 31) as well as the required purchase accounting adjustments for deferred revenue. As such, Endsley said the Company expects

total revenues for 2011 to range from $235 million to $248 million (versus earlier guidance of $224 million to $240 million), with Wireless between $193 million and $200 million (up from $182 million and $192 million) and Software between $42 million and $48 million;

operating expenses (excluding depreciation, amortization and accretion) to range from $162 million to $174 million (versus earlier guidance of $167 million to $176 million), with Wireless between $127 million and $134 million (versus $132 million and $136 million) and Software between $35 million and $40 million;

capital expenses to range from $6.5 million to $9 million (versus prior guidance of $6 million to $9 million), with Wireless between $6 million and $8 million (versus $5 million and $7 million) and Software between $0.5 million and $1 million (versus $1 million and $2 million).