Release Date: July 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Spok Holdings Inc (SPOK, Financial) reported over $7 million in adjusted EBITDA for Q2 2024, covering the $6.3 million returned to stockholders.
- The company saw a more than 10% growth in second-quarter software operations bookings compared to the first quarter.
- Net unit churn in the wireless segment dropped below 1% in Q2 2024, significantly improving from the prior quarter.
- Spok Holdings Inc (SPOK) maintains strong relationships with top healthcare systems in the nation, contributing to consistent sales.
- The company reiterated its financial guidance for 2024, expecting total revenue to range from $136 million to $144 million and adjusted EBITDA to range from $27.5 million to $32.5 million.
Negative Points
- Total GAAP revenue for Q2 2024 was $34 million, down from $36.5 million in the prior year.
- License and hardware revenue in Q2 2024 totaled $2 million, a significant drop from $4.6 million in the same period of 2023.
- GAAP net income for Q2 2024 was $3.4 million, down from $4.7 million in Q2 2023.
- The company experienced a sequential step down in wireless ARPU, which was unexpected given recent price increases and the rollout of new GenA pagers.
- Adjusted EBITDA in Q2 2024 was $7 million, down from $8.5 million in the prior year period, reflecting a highly successful Q2 2023 that was not replicated.
Q & A Highlights
Q: Was the performance of software deals in Q2 2024 in line with expectations?
A: Yes, the performance was in line with expectations. Some deals with higher license software components slipped into Q3, but the overall trajectory remains positive. (Vincent Kelly, CEO)
Q: Are you confident in achieving double-digit growth for software operations bookings in 2024 despite a 16% decline in the first half?
A: Absolutely confident in achieving double-digit growth for the full year 2024. (Vincent Kelly, CEO)
Q: What is the expectation for wireless churn in the second half of 2024?
A: While 0.8% churn in Q2 was phenomenal, we expect the full year churn to be around 4% to 5%, possibly slightly better. (Calvin Rice, CFO)
Q: Why was there a sequential step down in wireless ARPU from Q1 to Q2?
A: The step down was due to a variable component in ARPU, such as overcharges. We expect ARPU to benefit from price increases and GenA pager sales in the coming months. (Calvin Rice, CFO)
Q: What is the expected cash balance by the end of 2024?
A: We expect to finish the year with cash balances between $28 million and $30 million. (Calvin Rice, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
