Spok Holdings, Inc (SPOK)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 missed Street on revenue and EPS while guidance was reaffirmed: revenue $33.867M vs S&P Global consensus $35.9M*, diluted EPS $0.15 vs $0.19*; adjusted EBITDA was $6.61M (company) vs EBITDA consensus $7.3M* .*
• Software license softness and lower bookings timing were the primary drivers; management said several large deals slipped into Q4 after an exceptionally strong Q2, and reiterated FY25 revenue and adjusted EBITDA guidance .
• Wireless metrics remained resilient: ARPU rose to $8.19 (+3% YoY) and net churn improved to 1.4% (from 1.6% in Q2), with a 3.5% September price increase expected to flow through in Q4 .
• Capital returns remain a core pillar: the Board declared a $0.3125 quarterly dividend; adjusted EBITDA covered the dividend, and cash ended at $21.4M with no debt .
• Near‑term stock catalysts: closure of slipped software deals in Q4, Q4 revenue uplift from price actions, and confirmation that FY25 guidance ranges are achievable despite Q3 softness .

What Went Well and What Went Wrong

What Went Well

• Recurring wireless and managed services continued to offset secular declines: ARPU rose to $8.19 (+3% YoY), churn improved to 1.4%, and managed services revenue grew 87% YoY in Q3; professional services revenue grew ~13% YoY in Q3 .
• Capital allocation discipline intact: $6.6M adjusted EBITDA “covered our quarterly dividend,” with quarter‑end cash of $21.4M and no debt; $6.4M returned to shareholders in Q3 .
• Guidance reaffirmed with robust pipeline narrative: “we are reiterating our full year 2025 guidance estimates for revenue and adjusted EBITDA” and management expects a “strong fourth quarter” given large deals in the hopper .

Selected quotes:

• “In the third quarter, we generated more than $6.6 million of adjusted EBITDA and returned the majority of that amount to our stockholders in the form of our regular quarterly dividend.” — CEO Vince Kelly
• “We are reaffirming our financial outlook… For the year, we expect total revenue to range from $138 million to $143.5 million… adjusted EBITDA… $28.5 million to $32.5 million.” — CFO Al Galgano
• “We’re very bullish… some very large deals in the hopper… we expect to close in this quarter and report a good fourth quarter.” — Management in Q&A [2 shocking Q3 softness commentary]

What Went Wrong

• Software license revenue was weak ($1.08M, -47% YoY) as bookings timing slipped from Q3 to Q4; management reiterated license revenue lumpiness .
• Consolidated revenue fell 2.9% YoY to $33.867M and diluted EPS fell to $0.15 from $0.18 YoY; operating margin contracted to 12.9% vs 14.2% YoY .
• Adjusted EBITDA declined to $6.61M from $7.53M YoY amid lower top line and flat adjusted opex; Street EBITDA expectations (S&P) were higher at $7.3M* .*

Financial Results

Headline Results vs YoY, QoQ, and Consensus

Notes: All dollars in millions where applicable. Consensus values marked with * are from S&P Global; the company reports adjusted EBITDA as a non‑GAAP measure with reconciliations provided in the release . Values retrieved from S&P Global.*

Segment Revenue and Mix

Totals by segment

Q3 2025 software components

KPIs and Operating Metrics

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

Strategic messages (prepared remarks)

• Focus and priorities: “Our mission remains… to generate cash and return capital to our stockholders over the long term, while responsibly investing in and growing our business.”
• Product platform differentiation: Spok Console, Messenger (FDA 510(k) cleared), and Mobile underpin enterprise workflows and mission‑critical alerts across 2,200+ facilities; viewed as “indispensable” by customers .
• Balanced investment and returns: “We generated more than $6.6 million of adjusted EBITDA and returned the majority… as our regular quarterly dividend… expect cash balances to continue to grow through the remainder of the year.”

Important quotes

• “Based on our performance… we are reiterating our full year 2025 guidance estimates for revenue and adjusted EBITDA.” — CEO Vince Kelly
• “RPU increased $0.24 or 3% from the prior year… 3.5% price increase in September… fully reflected in fourth quarter revenue.” — CFO Al Galgano
• “We had some big deals from the third quarter pushing into the fourth quarter… we’re very bullish… expect to close in this quarter and report a good fourth quarter.” — Management, Q&A

Q&A Highlights

• License revenue variability and bookings timing: Management reiterated license lumpiness and noted several Q3 deals slipped to Q4 after a very strong Q2; internal operations bookings target was missed but pipeline supports a strong Q4 .
• Outlook for Q4 and beyond: Reiterated FY guide and expressed confidence in closing large enterprise deals in Q4; expects continued software revenue growth with managed services traction .
• R&D cadence: FY25 R&D of “a little over $12M” and ~+$1M YoY increases through 2026 aimed at consolidating and enhancing Spok Care Connect; expected benefits include more new logos and multi‑year engagements .

Estimates Context

• S&P Global consensus for Q3 2025: Revenue $35.9M*, Primary EPS $0.19*, EBITDA $7.3M* (one estimate each for EPS and revenue) [GetEstimates].*
• Actuals: Revenue $33.867M (company), diluted EPS $0.15 (company), GAAP EBITDA $5.217M and Adjusted EBITDA $6.610M (company) .
• Interpretation: Results were below consensus on revenue and EPS; EBITDA also trailed S&P’s EBITDA consensus. Management reaffirmed FY25 guidance, citing timing of large software deals and expected Q4 uplift from pricing and closes .

Values retrieved from S&P Global.*

Key Takeaways for Investors

• Q3 softness is primarily timing‑related in software; watch Q4 closes and the magnitude of license recovery relative to the reiterated FY guide .
• Recurring drivers are stable: wireless ARPU growth, improving churn, and managed services expansion provide ballast against unit declines; Q4 will fully reflect the September price increase on ~50–60% of units .
• Dividend remains well‑supported by adjusted EBITDA and cash, with $21.4M cash and no debt; continued capital returns are a core part of the thesis .
• Guidance credibility: after raising in Q2 and reaffirming in Q3, execution in Q4 is critical to sustain credibility and multiple; pipeline commentary implies potential upside if large enterprise deals close as expected .
• Watch managed services mix: enterprise traction and multi‑year terms support backlog visibility; sustained growth here can mitigate license lumpiness and support margin stability .
• Risk monitor: prolonged softness in license bookings, further unit declines outpacing ARPU gains, or delays in expected Q4 closes would pressure revenue and EBITDA vs the upper half of guidance .

Appendix: Additional Items

• Dividend declared: $0.3125 per share, payable Dec 9, 2025; record date Nov 18, 2025 .
• Cash and liquidity: $21.379M cash at quarter‑end; no debt .
• Non‑GAAP policy: Company provides adjusted operating expenses and adjusted EBITDA; reconciliations included in the press release and 8‑K .