Executive Summary

Q1 2025 was a clean top-line and EPS beat with revenue of $36.29M vs S&P Global consensus $34.0M* and diluted EPS of $0.25 vs $0.18*; adjusted EBITDA was $8.20M, which is above the Street’s EBITDA consensus $7.1M*, though GAAP EBITDA was $6.88M, slightly below that consensus .*
Results were driven by a 9.2% y/y increase in Software revenue (professional services +44% y/y, with managed services +183% y/y) and continued wireless ARPU expansion (+4.4% y/y to $8.24), partially offsetting unit churn .
Management reiterated FY25 guidance (Total revenue $134–$142M; Adj. EBITDA $27.5–$32.5M) despite macro/tariff uncertainty; they do not expect material impact on revenue or supply chain and highlighted hospital communications as “essential utility” .
Sequential momentum was notable: revenue up >7% q/q to $36.3M (from $33.9M in Q4) and Adj. EBITDA up to $8.2M (from $7.1M), with Q1 bookings of $8.3M and backlog of $63.2M supporting forward visibility .
Capital returns remain a core pillar: $7.9M returned in Q1; Board declared a $0.3125 quarterly dividend (payable Jun 24, 2025), reinforcing income support while investing ~$11–$12M in R&D for FY25 .

What Went Well and What Went Wrong

What Went Well
- Software momentum: Software revenue +9.2% y/y to $17.82M, with professional services +25.6% y/y (projects) and +183% y/y (managed services); 22 six‑figure contracts in the quarter .
- Wireless monetization: ARPU rose 4.4% y/y to $8.24 and management raised prices on unreturned pagers, expected to benefit revenue by ~$1M annualized; Q1 wireless product revenue uplift reflected this initiative .
- Profitability and cash discipline: Net income +22.7% y/y to $5.20M; Adj. EBITDA +8.9% y/y to $8.20M; management reiterated FY25 guidance and reiterated its “cash generation and return to shareholders” strategy .
What Went Wrong
- Wireless secular churn persists: Units in service fell to 705K (from 753K y/y), continuing the structural decline in paging, albeit offset by ARPU/pricing actions .
- Maintenance softness: Software maintenance edged down 2.1% y/y to $9.08M; CFO flagged it may be “in line or slightly below” prior year near-term given timing of license sales and conversion cycles .
- EBITDA definition nuance vs Street: GAAP EBITDA was $6.88M vs EBITDA consensus $7.1M*, implying a slight miss on an unadjusted basis, though Adjusted EBITDA of $8.20M was stronger; low coverage (one estimate) limits signal .*

Financial Results

Summary P&L and margins (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Total Revenue ($M)	$34.87	$33.89	$36.29
Wireless Revenue ($M)	$18.26	$18.37	$18.47
Software Revenue ($M)	$16.61	$15.52	$17.82
Operating Income ($M)	$4.96	$4.64	$6.02
Operating Margin (%)	14.2%	13.7%	16.6%
Net Income ($M)	$3.66	$3.64	$5.20
Diluted EPS ($)	$0.18	$0.18	$0.25
EBITDA ($M, GAAP)	$6.04	$5.58	$6.88
Adjusted EBITDA ($M)	$7.53	$7.06	$8.20

Q1 2025 actual vs S&P Global consensus

Metric	Consensus	Actual
Revenue ($M)	$34.0*	$36.29
Primary EPS ($)	$0.18*	$0.25
EBITDA ($M)	$7.1*	$6.88 (GAAP) ; $8.20 (Adj.)

Consensus coverage: 1 estimate for revenue and EPS in Q1 2025.*

Segment details (Q1 2025 vs Q1 2024)

Segment/Line ($000s)	Q1 2024	Q1 2025	y/y
Wireless – Paging revenue	17,970	17,607	(2.0)%
Wireless – Product & other	625	867	38.7%
Total Wireless	18,595	18,474	(0.7)%
Software – License	2,626	2,631	0.2%
Software – Prof. Services (projects)	3,561	4,471	25.6%
Software – Prof. Services (managed)	464	1,315	183.4%
Software – Hardware	384	321	(16.4)%
Software – Maintenance	9,279	9,082	(2.1)%
Total Software	16,314	17,820	9.2%
Total Revenue	34,909	36,294	4.0%

KPIs and Mix (oldest → newest)

KPI	Q3 2024	Q4 2024	Q1 2025
Wireless Units in Service (000s)	730	720	705
Wireless ARPU ($)	7.95	8.16	8.24
Software Operations Bookings ($M)	10.38	7.12	8.34
Software Backlog ($M, period end)	63.58	62.44	63.15

Notes:

CFO highlighted revenue up >7% q/q (Q1 $36.3M vs Q4 $33.9M) .
Gross margin dynamics: CFO noted gross margin moved to ~80% on mix/volume; expects some fluctuation but no structural change .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Wireless Revenue ($M)	FY 2025	$69.0–$72.0	$69.0–$72.0	Maintained
Software Revenue ($M)	FY 2025	$65.0–$70.0	$65.0–$70.0	Maintained
Total Revenue ($M)	FY 2025	$134.0–$142.0	$134.0–$142.0	Maintained
Adjusted EBITDA ($M)	FY 2025	$27.5–$32.5	$27.5–$32.5	Maintained
Dividend per share (quarterly)	2025	$0.3125 (ongoing)	$0.3125 declared Apr 30 for Jun 24 payment	Maintained

Management rationale for maintaining guidance: macro/tariff uncertainty, though no material impact expected on revenue or supply chain; strong Q1 start but adopting “guarded optimism” until visibility improves .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Software bookings momentum	Q3: $10.4M bookings; backlog +19% y/y . Q4: $7.1M bookings; FY $34.1M; backlog $62.4M (+22% y/y) .	Q1: $8.3M bookings; 22 six‑figure deals; backlog $63.2M (+15.5% y/y) .	Sustained strength; healthy pipeline.
Managed services mix	Noted as growing component through H2’24 .	Managed services $1.3M (22.7% of PS) and +180%+ y/y; ratable revenue, churn benefit .	Increasing mix; supports visibility.
Wireless ARPU/pricing & GenA pager	ARPU rising; ARPU $7.95 in Q3; $8.16 in Q4 .	ARPU $8.24 (+4.4% y/y); increased “disconnect fee” price → ~$1M annual benefit; GenA pager sales support ARPU .	ARPU tailwind offsets unit decline.
Macro/tariffs, supply chain	Macro referenced in risk factors .	No material impact expected on revenue/supply chain; guidance reiterated .	Monitored; neutral.
Customer satisfaction/brand	Ongoing leadership in clinical comms .	No.1 in two Black Book 2025 categories (8th straight year) .	Strengthening reputation.
R&D/product roadmap	FY24 R&D $11.5M; building pipeline .	Targeting $11–$12M FY25; positive HIMSS reception for new UI and capabilities .	Continued investment; improving demand signals.

Management Commentary

Strategy and capital returns: “Our mission remains… to generate cash and return capital to our shareholders… while responsibly investing in and growing our business.”
Macro/tariffs stance: “We believe that neither our revenue nor our supply chain will be materially impacted… [we] feel comfortable reiterating our financial guidance for the year.”
Software/services engine: “Professional services revenue… was up nearly 44%… Managed services… $1.3M or 22.7% of total professional services revenue.”
Wireless pricing lever: “Increase in the price that we charge… for pagers that are not returned… should lead to an annualized benefit of at least $1M.”
Sales execution: “22 six‑figure customer contracts… 2 new logo agreements… average contract size continues to grow.”

Q&A Highlights

Seasonality of large contracts: No notable seasonality; activity trended up through the quarter and continued into Q2; no tariff-related demand pressure observed .
Wireless product revenue uplift: Primarily driven by higher charges for unreturned pagers; expected ~~$1M annual benefit (~~$250K per quarter) .
Gross margin sustainability: Elevated by strong revenue mix/volume; management expects fluctuations but no fundamental change in cost structure .
Backlog conversion: Roughly half services/half maintenance; maintenance recognized over ~12 months; services typically convert over ~9–15 months .
HIMSS engagement: Pre‑qualified meetings drove pipeline; positive reception to new UI/features; plan to increase presence next year .
Managed services strategy: Provides fixed customer cost, ratable revenue for Spok, and improves retention; hosted services at ~a dozen customers, growing but not yet material .

Estimates Context

Q1 2025 vs S&P Global consensus: Revenue $36.29M vs $34.0M*; EPS $0.25 vs $0.18*; EBITDA $6.88M (GAAP) vs $7.1M*; Adjusted EBITDA $8.20M exceeded the consensus level (definition differences apply) .*
Coverage is thin (one estimate for revenue and EPS), so estimate signal quality is limited; nevertheless, the magnitude of the revenue and EPS beat suggests upward pressure on near-term Street forecasts, especially for software mix and adjusted EBITDA trajectory [GetEstimates Q1 2025].*
FY25 guidance maintained; given backlog and ARPU tailwinds, risk skews toward high-end if software license mix and services utilization remain favorable .

Values retrieved from S&P Global.*

Key Takeaways for Investors

Positive print with clear beat on revenue and EPS vs consensus; profitability quality solid with operating margin expansion to 16.6% and robust adjusted EBITDA, aided by software/services mix .*
Structural wireless churn persists, but ARPU/pricing and GenA pager sales are offsetting more than expected; the disconnect‑fee initiative adds a measurable revenue lever (~$1M annualized) .
Managed services scaling as a percentage of professional services supports revenue visibility, backlog conversion, and customer retention; ratable profile should stabilize cash generation .
Guidance reiteration amid macro/tariff noise signals confidence; backlog and bookings give line-of-sight for software growth while wireless declines stay manageable .
Dividend durability remains a tangible part of the equity story; Q1 cash dip is seasonal and management expects cash to build through the year .
Watch for near-term catalysts: sustained six‑figure deal cadence, increasing managed services penetration, and maintenance stabilization (timing of license-to-maintenance conversion) .
Risk checks: limited sell‑side coverage (one estimate) and definition variance (GAAP vs adjusted EBITDA) can create mixed signals around “beats”; focus on mix, margin trajectory, and backlog burn‑down cadence .*

Footnote: Asterisk (*) denotes values retrieved from S&P Global via analyst consensus (GetEstimates).

Appendix: Additional Data Points

Dividend: $0.3125 per share declared for payment on Jun 24, 2025 (record date May 23, 2025) .
Cash and cash equivalents: $19.87M at Mar 31, 2025; no debt .
Non‑GAAP definitions: Adjusted operating expenses exclude depreciation/accretion and severance/restructuring; Adjusted EBITDA adds back tax, interest, D&A, stock‑based comp, impairment, and severance/restructuring .

Spok Holdings, Inc (SPOK)·Q1 2025 Earnings Summary