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Spok Reports 2016 Second Quarter Operating Results; Software Bookings Increase, Wireless Trends Improve

July 27, 2016 4:15 PM

Board Declares Regular Quarterly Dividend

SPRINGFIELD, Va.--(BUSINESS WIRE)-- Spok Holdings, Inc. (NASDAQ: SPOK), a global leader in critical communications, today announced operating results for the second quarter ended June 30, 2016. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.125 per share, payable on September 9, 2016 to stockholders of record on August 19, 2016.

2016 Second-Quarter Results:

In the 2016 second quarter, consolidated revenue was $44.6 million, compared to $48.0 million in the second quarter of 2015. Software revenue was $16.8 million in the second quarter of 2016, compared to $17.7 million in the second quarter of 2015. Wireless revenue totaled $27.8 million in the second quarter, compared to $30.3 million in the prior-year quarter.

Net income for the second quarter of 2016 was $3.5 million, or $0.17 per diluted share, up from $3.4 million, or $0.16 per diluted share, in the second quarter of 2015.

Second quarter EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) totaled $8.9 million, or 19.8 percent of revenue, compared to EBITDA of $9.1 million, or 18.9 percent of revenue, in the second quarter of 2015.

Other key results and highlights for the second quarter included:

2016 Year-to-Date Results:

In the first half of 2016, consolidated revenue was $90 million, compared to $96.1 million in the first half of 2015. Software revenue was $34 million in the first half of 2016, compared to $35.2 million in the prior year period. Wireless revenue totaled $56 million in the first half of 2016, compared to $60.9 million in the year-to-date 2015 period.

Net income for the first half of 2016 was $6.9 million, or $0.33 per diluted share, compared to $7.3 million, or $0.33 per diluted share, in the 2015 year-to-date period.

First half 2016 EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) totaled $18.0 million, or 20 percent of revenues, compared to $19.1 million, or 19.9 percent of revenue, in the first half of 2015.

Management Commentary:

“We are pleased with our performance in the second quarter of 2016 and believe that we are beginning to see the benefits from the investments that we made to enhance and upgrade our product development team and tools, as well as our sales infrastructure and management,” said Vincent D. Kelly, chief executive officer. “We saw strong performance in a number of key operating measures and solid sequential improvements in sales bookings and backlog levels, operating expense management, cash flow and subscriber retention. We believe that continued investments will yield significant future benefits in the form of our improved, integrated communication platform, Spok Care Connect®, and continued momentum in bookings levels. Overall, we continued to operate profitably, enhance our product offerings, and further strengthen our balance sheet. Our ability to generate healthy cash flows allowed us to execute against our capital allocation strategy, returning capital to shareholders while adding more than $5 million to our cash balances.”

Commenting on software results, Kelly said: “As anticipated, software revenues were in-line with prior quarter levels as we positioned ourselves for the second half of the year, when software sales tend to be more robust.” Kelly attributed the ability to maintain sequential software revenue levels primarily to a more than 99 percent renewal rate on software maintenance contracts. Similar to Spok’s wireless revenue stream, software maintenance revenue is a largely recurring revenue stream that provides the Company with a more stable revenue and margin base.

Kelly said second quarter bookings of $20.1 million were up sharply from $15.1 million in the prior quarter, and included $9.9 million of maintenance renewals bookings, a record high for the second quarter. Additionally, software backlog of $39.5 million at June 30th was up more than 7 percent from the prior quarter level. “We will continue to build on the sequential momentum we saw in the second quarter. We are encouraged as bookings included sales to both new and current customers, with existing customers adding products and applications to expand their portfolio of communications solutions. Customer demand remained strongest for upgrades to call center solutions, healthcare applications to increase patient safety, and improved nursing workflows.” Kelly added: “We continue to see growing demand for our software solutions for critical smartphone communications, secure texting, and emergency management, as well as clinical alerting, and we are proud to be working with more than 2,000 hospitals world-wide, including all of the best adult and children’s hospitals as defined by U.S. News & World Report.”

Kelly also noted that in addition to the Company’s quarterly financial performance, progress was made in several other areas, including product development, sales strategy and key strategic partnership agreements. “Spok continues to generate activity and sales momentum at the conferences we attend,” commented Kelly. “In June, we saw tremendous interest at those conferences, which included the Call Center Conference & Expo, as well as the National Emergency Number Association (NENA) conference earlier in the month. Early in May, we were also pleased to publish the results of a customer study demonstrating how Spok customers are achieving notable improvements in staff efficiency and patient care coordination workflows throughout their organizations using Spok Care Connect solutions. These hospitals and health systems are reporting improvements, including faster code call processes, compliance with Joint Commission standards, reduced patient discharge times, and increased patient satisfaction. Please visit our website to see these customer success statistics in our new infographic, The ROI of Communication Technology. We are confident that Spok is well positioned to capitalize on our sales and marketing efforts in order to stimulate long-term growth.”

The Company posted solid results for its wireless products and services in the second quarter. Gross pager placements of 39,000 were in-line with the year-earlier quarter, and the highest level in the past twelve months, while gross disconnects of 48,000 improved sharply from 59,000 in the second quarter of 2015. “As a result, annual net pager losses declined to an historical low of 5.5 percent from the prior year’s second quarter, and were 0.8 percent in the second quarter, down significantly from 1.6 percent in the prior-year quarter,” continued Kelly. “Overall, wireless sales efforts continued to focus primarily on our core market segments of Healthcare, Government and Large Enterprise, which represented approximately 91.6 percent of our subscriber base and 89.6 percent of our paging revenue at quarter end. Healthcare comprised 78.2 percent of our subscriber base, and continued to be our best performing market segment with the highest rate of gross placements and lowest rate of unit disconnects.”

Spok returned capital to stockholders, totaling $3.7 million, in the second quarter of 2016. During the period, the Company paid $2.6 million in dividends and repurchased 65,791 shares of common stock, totaling $1.1 million, under its stock buy-back program. Kelly added, “Throughout 2016, we will remain focused on returning value to our shareholders through our multi-faceted capital allocation strategy, which includes dividends, share repurchases and key strategic investments in our products and business designed to create sustainable growth.”

Shawn E. Endsley, chief financial officer, said: “Continued expense management and strong financial discipline have allowed us to invest in our business for long-term growth. Our ability to align our expense base with the market demand we are seeing and drive high renewal rates in our recurring revenue categories, helped Spok maintain solid operating cash flow and operating margins for the quarter. We also strengthened our balance sheet, recording a cash balance of $117.1 million at June 30, 2016, and continued to operate as a debt-free company at quarter-end.”

Business Outlook:

Commenting on the Company’s previously provided financial guidance for 2016, Endsley noted: “As a result of the solid performance we saw in the second quarter, we are maintaining the 2016 guidance range that we provided last quarter.” With regard to financial guidance for 2016, Endsley reiterated that the Company expects total revenue to range from $174 million to $192 million, operating expenses (excluding depreciation, amortization and accretion) to range from $153 million to $159 million, and capital expenditures to range from $6 million to $8 million.

2016 Second-Quarter Call and Replay:

Spok plans to host a conference call for investors to discuss its 2016 second quarter results at 10:00 a.m. ET on Thursday, July 28, 2016. Dial-in numbers for the call are 719-325-2244 or 888-510-1786. The pass code for the call is 3269514. A replay of the call will be available from 1:00 p.m. ET on July 28, 2016 until 1:00 p.m. ET on Thursday, August 11, 2016. To listen to the replay, please register at http:tinyurl.com/spok2016Q2earningsreplay. Please enter the registration information, and you will be given access to the replay.

About SpokSpok, Inc., a wholly owned subsidiary of Spok Holdings, Inc. (NASDAQ: SPOK), headquartered in Springfield, Va., is proud to be the global leader in critical communications for healthcare, government, public safety, and other industries. We deliver smart, reliable solutions to help protect the health, well-being, and safety of people around the globe. Our customers send over 100 million messages each month through their Spok® solutions, and they rely on Spok for workflow improvement, secure texting, paging services, contact center optimization, and public safety response. When communications matter, Spok delivers.

Spok is a trademark of Spok Holdings, Inc.

Safe Harbor Statement under the Private Securities Litigation Reform Act: Statements contained herein or in prior press releases which are not historical fact, such as statements regarding Spok’s future operating and financial performance, are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that may cause Spok’s actual results to be materially different from the future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expectations include, but are not limited to, declining demand for paging products and services, continued demand for our software products and services, our ability to develop additional software solutions for our customers and manage our development as a global organization, the ability to manage operating expenses, future capital needs, competitive pricing pressures, competition from both traditional paging services and other wireless communications services, competition from other software providers, government regulation, reliance upon third-party providers for certain equipment and services, as well as other risks described from time to time in our periodic reports and other filings with the Securities and Exchange Commission. Although Spok believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Spok disclaims any intent or obligation to update any forward-looking statements.

SPŌK HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (a)
(Unaudited and in thousands except share, per share amounts and ARPU)
For the three months ended For the six months ended

6/30/2016

6/30/2015

6/30/2016

6/30/2015

Revenue:
Wireless $ 27,859 $ 30,222 $ 56,031 $ 60,912
Software 16,776 17,747 33,992 35,195
Total revenue 44,635 47,969 90,023 96,107
Operating expenses:
Cost of revenue 7,513 9,131 15,528 17,944
Service, rental and maintenance 11,399 11,003 22,612 22,260
Selling and marketing 6,429 6,790 12,957 13,838
General and administrative 10,439 10,472 20,949 21,473
Severance — 1,504 (3 ) 1,504
Depreciation, amortization and accretion 3,235 3,448 6,558 7,195
Total operating expenses 39,015 42,348 78,601 84,214
% of total revenue 87.4 % 88.3 % 87.3 % 87.6 %
Operating income 5,620 5,621 11,422 11,893
% of total revenue 12.6 % 11.7 % 12.7 % 12.4 %
Interest income (expense), net 61 3 109 2
Other income (expense), net 104 264 357 325
Income before income tax expense 5,785 5,888 11,888 12,220
Income tax benefit (expense) (2,334 ) (2,512 ) (4,993 ) (4,927 )
Net income $ 3,451 $ 3,376 $ 6,895 $ 7,293
Basic net income per common share $ 0.17 $ 0.16 $ 0.33 $ 0.33
Diluted net income per common share $ 0.17 $ 0.16 $ 0.33 $ 0.33
Basic weighted average common shares outstanding 20,544,327 21,677,299 20,614,023 21,787,434
Diluted weighted average common shares outstanding 20,705,206 21,735,829 20,831,740 21,843,591
Reconciliation of operating income to EBITDA (b):
Operating income $ 5,620 $ 5,621 $ 11,422 $ 11,893
Add back: depreciation, amortization and accretion 3,235 3,448 6,558 7,195
EBITDA $ 8,855 $ 9,069 $ 17,980 $ 19,088
% of total revenue 19.8 % 18.9 % 20.0 % 19.9 %
Key statistics:
Units in service 1,144 1,211 1,144 1,211
Average revenue per unit (ARPU) $ 7.71 $ 7.86 $ 7.72 $ 7.87
Bookings $ 20,063 $ 21,027 $ 35,170 $ 38,767
Backlog $ 39,475 $ 43,524 $ 39,475 $ 43,524
(a) Slight variations in totals are due to rounding.
(b) EBITDA or earnings before interest, taxes, depreciation, amortization and accretion is a non-GAAP measure and is presented for analytical purposes only

SPŌK HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (a)
(Unaudited and in thousands except share, per share amounts and ARPU)
For the three months ended

6/30/2016

3/31/2016

12/31/2015

9/30/2015

6/30/2015

3/31/2015

12/31/2014

9/30/2014

Revenue:
Wireless $ 27,859 $ 28,172 $ 28,727 $ 29,375 $ 30,222 $ 30,690 $ 31,678 $ 32,855
Software 16,776 17,216 18,612 16,806 17,747 17,448 19,591 16,936
Total revenue 44,635 45,388 47,339 46,181 47,969 48,138 51,269 49,791
Operating expenses:
Cost of revenue 7,513 8,017 8,035 7,871 9,131 8,813 10,571 8,000
Service, rental and maintenance 11,399 11,213 11,024 11,117 11,003 11,256 11,285 10,988
Selling and marketing 6,429 6,529 7,036 6,572 6,790 7,048 7,915 7,072
General and administrative 10,439 10,510 10,276 10,410 10,472 11,001 11,905 10,866
Severance — (4 ) 1,056 141 1,504 — 926 545
Depreciation, amortization and accretion 3,235 3,323 3,362 3,413 3,448 3,747 4,049 4,247
Total operating expenses 39,015 39,588 40,789 39,524 42,348 41,865 46,651 41,718
% of total revenue 87.4 % 87.2 % 86.2 % 85.6 % 88.3 % 87.0 % 91.0 % 83.8 %
Operating income 5,620 5,800 6,550 6,657 5,621 6,273 4,618 8,073
% of total revenue 12.6 % 12.8 % 13.8 % 14.4 % 11.7 % 13.0 % 9.0 % 16.2 %
Interest income (expense), net 61 49 13 1 3 (1 ) (262 ) (63 )
Other income (expense), net 104 254 71 784 264 60 (188 ) (2 )
Income before income tax expense 5,785 6,103 6,634 7,442 5,888 6,332 4,168 8,008
Income tax benefit (expense) (2,334 ) (2,659 ) 66,087 (3,222 ) (2,512 ) (2,415 ) 2,744 (3,356 )
Net income $ 3,451 $ 3,444 $ 72,721 $ 4,220 $ 3,376 $ 3,917 $ 6,912 $ 4,652
Basic net income per common share $ 0.17 $ 0.17 $ 3.54 $ 0.20 $ 0.16 $ 0.18 $ 0.32 $ 0.21
Diluted net income per common share $ 0.17 $ 0.17 $ 3.53 $ 0.20 $ 0.16 $ 0.18 $ 0.31 $ 0.21
Basic weighted average common shares outstanding 20,544,327 20,683,719 20,528,326 21,301,311 21,677,299 21,898,792 21,554,746 21,651,347
Diluted weighted average common shares outstanding 20,705,206 20,845,661 20,628,053 21,352,838 21,735,829 22,053,015 22,101,600 22,135,554
Reconciliation of operating income to EBITDA (b):
Operating income $ 5,620 $ 5,800 $ 6,550 $ 6,657 $ 5,621 $ 6,273 $ 4,618 $ 8,073
Add back: depreciation, amortization and accretion 3,235 3,323 3,362 3,413 3,448 3,747 4,049 4,247
EBITDA $ 8,855 $ 9,123 $ 9,912 $ 10,070 $ 9,069 $ 10,020 $ 8,667 $ 12,320
% of total revenue 19.8 % 20.1 % 20.9 % 21.8 % 18.9 % 20.8 % 16.9 % 24.7 %
Key statistics:
Units in service 1,144 1,153 1,173 1,192 1,211 1,230 1,256 1,274
Average revenue per unit (ARPU) $ 7.71 $ 7.77 $ 7.79 $ 7.82 $ 7.86 $ 7.91 $ 7.92 $ 7.97
Bookings $ 20,063 $ 15,106 $ 18,511 $ 16,746 $ 21,027 $ 17,740 $ 22,272 $ 20,362
Backlog $ 39,475 $ 36,766 $ 38,650 $ 41,639 $ 43,524 $ 40,551 $ 42,391 $ 42,117
(a) Slight variations in totals are due to rounding.
(b) EBITDA or earnings before interest, taxes, depreciation, amortization and accretion is a non-GAAP measure and is presented for analytical purposes only

SPŌK HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (a)
(In thousands)

6/30/2016

12/31/2015

(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 117,095 $ 111,332
Accounts receivable, net 23,737 22,638
Prepaid expenses and other 4,116 5,352
Inventory 2,129 2,291
Total current assets 147,077 141,613
Property and equipment, net 14,297 15,386
Goodwill 133,031 133,031
Other intangible assets, net 12,817 14,964
Deferred income tax assets, net 79,644 83,983
Other assets 1,541 1,445
Total assets $ 388,407 $ 390,422
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities $ 8,370 $ 9,247
Accrued compensation and benefits 11,618 10,864
Deferred revenue 28,239 27,045
Total current liabilities 48,227 47,156
Deferred revenue 674 741
Other long-term liabilities 8,960 8,972
Total liabilities 57,861 56,869
Commitments and contingencies
Stockholders' equity:
Preferred stock — —
Common stock 2 2
Additional paid-in capital 105,867 110,435
Retained earnings 224,677 223,116
Total stockholders' equity 330,546 333,553
Total liabilities and stockholders' equity $ 388,407 $ 390,422
(a) Slight variations in totals are due to rounding.

SPŌK HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a)
(Unaudited and in thousands)
For the six months ended

6/30/2016

6/30/2015

Cash flows from operating activities:
Net income $ 6,895 $ 7,293
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion 6,558 7,195
Amortization of deferred financing costs - -
Deferred income (benefit) tax expense 4,346 4,086
Stock based compensation 1,368 1,104
Provisions for doubtful accounts, service credits and other 322 716
Adjustments of non-cash transaction taxes (169 ) (97 )
Loss/(Gain) on disposals of property and equipment (1 ) (166 )
Changes in assets and liabilities:
Accounts receivable (1,421 ) 2,239
Prepaid expenses, intangible assets and other assets 1,197 741
Accounts payable, accrued liabilities and other (358 ) (685 )
Customer deposits and deferred revenue 1,142 3,070
Net cash provided by operating activities 19,879 25,496
Cash flows from investing activities:
Purchases of property and equipment (2,982 ) (3,033 )
Proceeds from disposals of property and equipment 1 180
Net cash used in investing activities (2,981 ) (2,853 )
Cash flows from financing activities:
Cash distributions to stockholders (5,150 ) (6,069 )
Purchase of common stock (including commissions) (5,985 ) (3,475 )
Employee stock based compensation tax withholding - (3,825 )
Net cash used in financing activities (11,135 ) (13,369 )
Net increase in cash and cash equivalents 5,763 9,274
Cash and cash equivalents, beginning of period 111,332 107,869
Cash and cash equivalents, end of period $ 117,095 $ 117,143
Supplemental disclosure:
Income taxes paid $ 598 $ 337
(a) Slight variations in totals are due to rounding.

SPŌK HOLDINGS, INC.

CONSOLIDATED REVENUE
SUPPLEMENTAL INFORMATION (a)
(Unaudited and in thousands)
For the three months ended

6/30/2016

3/31/2016

12/31/2015

9/30/2015

6/30/2015

3/31/2015

12/31/2014

9/30/2014

Revenue
Paging $ 26,564 $ 27,101 $ 27,637 $ 28,196 $ 28,782 $ 29,491 $ 30,071 $ 30,776
Non-paging 1,295 1,071 1,090 1,179 1,440 1,199 1,607 2,079
Total wireless revenue $ 27,859 $ 28,172 $ 28,727 $ 29,375 $ 30,222 $ 30,690 $ 31,678 $ 32,855
Subscription 503 498 471 392 419 398 365 458
License 1,691 1,593 2,733 1,457 3,011 2,595 3,474 2,374
Services 4,202 4,315 4,610 4,600 4,609 5,018 5,579 4,305
Equipment 1,250 1,729 1,764 1,434 1,301 1,374 2,145 1,930
Operations revenue $ 7,646 $ 8,135 $ 9,578 $ 7,883 $ 9,340 $ 9,385 $ 11,563 $ 9,067
Maintenance revenue $ 9,130 $ 9,081 $ 9,034 $ 8,923 $ 8,407 $ 8,063 $ 8,028 $ 7,869
Total software revenue $ 16,776 $ 17,216 $ 18,612 $ 16,806 $ 17,747 $ 17,448 $ 19,591 $ 16,936
Total revenue $ 44,635 $ 45,388 $ 47,339 $ 46,181 $ 47,969 $ 48,138 $ 51,269 $ 49,791
(a) Slight variations in totals are due to rounding.

SPŌK HOLDINGS, INC.

CONSOLIDATED OPERATING EXPENSES
SUPPLEMENTAL INFORMATION (a)
(Unaudited and in thousands)
For the three months ended

6/30/2016

3/31/2016

12/31/2015

9/30/2015

6/30/2015

3/31/2015

12/31/2014

9/30/2014

Cost of revenue
Payroll and related $ 4,406 $ 4,634 $ 4,414 $ 4,277 $ 4,274 $ 4,157 $ 4,222 $ 3,743
Cost of sales 2,227 2,673 2,902 2,549 3,801 3,620 5,225 3,098
Stock based compensation 58 49 33 33 34 34 81 108
Other 822 661 686 1,012 1,022 1,002 1,043 1,051
Total cost of revenue 7,513 8,017 8,035 7,871 9,131 8,813 10,571 8,000
Service, rental and maintenance
Payroll and related 5,125 5,072 4,815 4,613 4,555 4,652 4,533 4,106
Site rent 3,668 3,660 3,663 3,763 3,783 3,766 3,834 3,914
Telecommunications 1,127 1,222 1,218 1,392 1,288 1,343 1,487 1,548
Stock based compensation 63 52 29 29 29 29 30 56
Other 1,416 1,207 1,299 1,320 1,348 1,466 1,401 1,364
Total service, rental and maintenance 11,399 11,213 11,024 11,117 11,003 11,256 11,285 10,988
Selling and marketing
Payroll and related 3,510 3,666 3,780 3,664 3,732 3,916 3,945 3,859
Commissions 1,559 1,525 1,754 1,858 1,792 1,836 2,481 1,949
Stock based compensation 75 48 (7 ) 16 51 51 131 151
Other 1,285 1,290 1,509 1,034 1,215 1,245 1,358 1,113
Total selling and marketing 6,429 6,529 7,036 6,572 6,790 7,048 7,915 7,072
General and administrative
Payroll and related 4,306 4,392 4,029 4,320 4,611 4,879 4,737 4,217
Stock based compensation 534 488 316 316 548 329 780 791
Facility rent 810 839 856 868 841 941 830 863
Outside services 1,921 1,726 1,783 1,864 1,728 1,786 1,786 1,698
Taxes, licenses and permits 1,060 1,055 1,132 1,068 1,150 1,125 1,283 1,788
Other 1,808 2,010 2,160 1,974 1,594 1,941 2,489 1,509
Total general and administrative 10,439 10,510 10,276 10,410 10,472 11,001 11,905 10,866
Severance — (4 ) 1,056 141 1,504 — 926 545
Depreciation, amortization and accretion 3,235 3,323 3,362 3,413 3,448 3,747 4,049 4,247
Operating expenses $ 39,015 $ 39,588 $ 40,789 $ 39,524 $ 42,348 $ 41,865 $ 46,651 $ 41,718
Capital expenditures $ 1,537 $ 1,445 $ 2,024 $ 1,318 $ 1,992 $ 1,040 $ 1,352 $ 1,291
(a) Slight variations in totals are due to rounding.

SPŌK 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

6/30/2016

3/31/2016

12/31/2015

9/30/2015

6/30/2015

3/31/2015

12/31/2014

9/30/2014

Paging units in service

Beginning units in service (000's) 1,153 1,173 1,192 1,211 1,230 1,256 1,274 1,299
Gross placements 39 28 31 36 40 29 35 45
Gross disconnects (48 ) (48 ) (50 ) (55 ) (59 ) (55 ) (53 ) (70 )
Net change (9 ) (20 ) (19 ) (19 ) (19 ) (26 ) (18 ) (25 )
Ending units in service 1,144 1,153 1,173 1,192 1,211 1,230 1,256 1,274
End of period units in service % of total (b)
Healthcare 78.2 % 77.5 % 77.0 % 76.3 % 75.9 % 74.6 % 74.1 % 73.6 %
Government 6.8 % 6.9 % 7.2 % 7.2 % 7.3 % 7.6 % 7.8 % 7.9 %
Large enterprise 6.6 % 6.9 % 6.9 % 7.1 % 7.3 % 7.6 % 7.6 % 7.8 %
Other(b) 8.3 % 8.7 % 9.0 % 9.3 % 9.5 % 10.2 % 10.4 % 10.7 %
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 114 118 123 128 134 139 145 152
101 to 1,000 units 228 238 243 250 256 266 277 282
>1,000 units 802 797 807 814 821 825 834 840
Total 1,144 1,153 1,173 1,192 1,211 1,230 1,256 1,274
Account size net loss rate(c)
1 to 100 units (4.0 )% (4.3 )% (3.9 )% (4.4 )% (3.4 )% (4.3 )% (4.7 )% (5.0 )%
101 to 1,000 units (4.0 )% (2.0 )% (2.9 )% (2.4 )% (3.8 )% (3.8 )% (1.9 )% (2.4 )%
>1,000 units 0.6 % (1.2 )% (0.9 )% (0.8 )% (0.6 )% (1.1 )% (0.7 )% (1.2 )%
Total (0.8 )% (1.7 )% (1.6 )% (1.5 )% (1.6 )% (2.1 )% (1.4 )% (1.9 )%
Account size ARPU
1 to 100 units $ 12.48 $ 12.57 $ 12.52 $ 12.49 $ 12.57 $ 12.58 $ 12.50 $ 12.54
101 to 1,000 units 8.65 8.70 8.65 8.69 8.72 8.74 8.76 8.76
>1,000 units 6.75 6.77 6.79 6.80 6.81 6.84 6.83 6.86
Total $ 7.71 $ 7.77 $ 7.79 $ 7.82 $ 7.86 $ 7.91 $ 7.92 $ 7.97
(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.

Al Galgano, 952-567-0295

[email protected]

Source: Spok Holdings, Inc.

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