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What changed in Spok Holdings, Inc's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Spok Holdings, Inc's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+169 added−174 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in Spok Holdings, Inc's 2025 10-K

169 paragraphs added · 174 removed · 151 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

46 edited+4 added−7 removed94 unchanged
Biggest changeWe pursue close, long-term relationships with our customers because we believe strong customer relationships enable us to retain our current customer base and expand our services and revenue to that customer base. 11 Table of Contents Competition The competitors and degree of competition vary among our various product categories. Competition is particularly strong for our wireless messaging services.
Biggest changeCompetition The competitors and degree of competition vary among our various product categories. Competition is particularly strong for our wireless messaging services. Within the wireless industry, companies compete on the basis of price, coverage area, services offered, transmission quality, network reliability and customer service.
Particular areas of strategic emphasis include: Acquire new customers and expand relationships within our existing customer base - We will continue to focus our sales and marketing efforts in the healthcare market in order to identify opportunities for new sales as well as grow revenues from our existing customer base.
Particular areas of strategic emphasis include: Acquire new customers and expand relationships within our existing customer base - We continue to focus our sales and marketing efforts in the healthcare market in order to identify opportunities for new sales as well as grow revenues from our existing customer base.
Research and Development We maintain a product development group, a substantial portion of which is focused on the enhancement of existing software products. Our product development group uses a methodology that balances enhancement requests from a number of sources, including customers, regulatory requirements, professional services staff, customer support incidents, known defects, market and technology trends, and competitive requirements.
Research and Development We maintain a product development group, a substantial portion of which is focused on the enhancement of existing software products. Our product development group uses a SAFe Agile methodology that balances enhancement requests from a number of sources, including customers, regulatory requirements, professional services staff, customer support incidents, known defects, market and technology trends, and competitive requirements.
This solution can send messages from the radiology departments by means of encrypted smartphone communications, two-way paging, secure email, secure text, images, annotations, and voice to a variety of endpoints such as workstations, laptops, tablets, smartphones, pagers, and other wireless devices.
This solution can send messages from the radiology department by means of encrypted smartphone communications, two-way paging, secure email, secure text, images, annotations, and voice to a variety of endpoints such as workstations, laptops, tablets, smartphones, pagers, and other wireless devices.
We believe our intellectual property distinguishes our business from our competition and is integral to our continued success in the area of clinical communication and collaboration solutions. The expiration dates of these trademarks range from 2025 to 2035 and can be extended for 10-year periods upon renewals.
We believe our intellectual property distinguishes our business from our competition and is integral to our continued success in the area of clinical communication and collaboration solutions. The expiration dates of these trademarks range from 2026 to 2035 and can be extended for 10-year periods upon renewals.
The Spok support service is augmented by third-party services where needed. Software license updates and product support are generally priced together as a percentage of the software licenses for which these services will be provided.
The Spok support service is augmented by third-party services where needed. Software license updates and product support are generally priced together as a percentage of the perpetual and term licenses for which these services will be provided.
By law, we are permitted to bill our customers for these regulatory costs and we typically do so. 13 Table of Contents Additionally, the Communications Assistance to Law Enforcement Act of 1994, ("CALEA"), and certain rules implementing CALEA, require some telecommunication companies, including Spok, to design and/or modify their equipment in order to allow law enforcement personnel to "wiretap" or otherwise intercept messages.
By law, we are permitted to bill our customers for these regulatory costs and we typically do so. Additionally, the Communications Assistance to Law Enforcement Act of 1994, ("CALEA"), and certain rules implementing CALEA, require some telecommunication companies, including Spok, to design and/or modify their equipment in order to allow law enforcement personnel to "wiretap" or otherwise intercept messages.
This website address is for information only and is not intended to be an active link or to incorporate any website information into this Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K").
This website address is for information only and is not intended to be an active link or to incorporate any website information into this Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K").
We monitor discussions at the FCC and FDA on pending changes in regulatory policy or regulations; however, we are unable to predict what changes, if any, may occur in 2025 to regulatory policy or regulations.
We monitor discussions at the FCC and FDA on pending changes in regulatory policy or regulations; however, we are unable to predict what changes, if any, may occur in 2026 to regulatory policy or regulations.
With larger organizations like Microsoft Corporation and Oracle Corporation entering the market in which we operate, they may have a competitive advantage through aggressive pricing power, established brand recognition, extensive capital resources, and broader delivery and distribution channels. Human Capital At December 31, 2024 and 2023, we had 410 and 384 full time equivalent employees ("FTEs"), respectively.
With larger organizations like Microsoft Corporation and Oracle Corporation entering the market in which we operate, they may have a competitive advantage through aggressive pricing power, established brand recognition, extensive capital resources, and broader delivery and distribution channels. Human Capital At December 31, 2025 and 2024, we had 421 and 410 full-time equivalent employees ("FTEs"), respectively.
We will continue to evaluate how best to deploy our capital resources to support sustainable business growth and maximize stockholder value. We expect to continue to pay a quarterly dividend of $0.3125 per share of common stock, or $1.250 annually, in 2025.
We continue to evaluate how best to deploy our capital resources to support sustainable business growth and maximize stockholder value. We expect to continue to pay a quarterly dividend of $0.3125 per share of common stock, or $1.250 annually, in 2026.
Authenticated users can log on anywhere, anytime to perform a variety of important updates to contact information and on-call schedules, search the directory, and send important messages. • Spok® Web On-Call Scheduling: Keeps personnel, calendars and on-call scheduling information updated, even with thousands of staff, using a secure web portal to maintain and allow password-protected access to the latest on-call schedules and personnel information. • Spok Voice Connect®: Enables the organization to process routine phone requests, including transfers, directory assistance, messaging and paging without live operators and with more ease-of-use than touch-tone menus. • Spok® Call Recording and Quality Management: Records, monitors, and scores operators’ conversations to allow for better management of calls, helping improve customer service.
Authenticated users can log on anywhere, anytime to perform a variety of important updates to contact information and on-call schedules, search the directory, and send important messages. • Spok® Web On-Call Scheduling: Keeps clinical and non-clinical personnel, calendars and on-call scheduling information updated, even with thousands of staff across numerous sites, using a secure web portal to maintain and allow password-protected access to the latest on-call schedules and personnel information. • Spok Voice Connect®: Enables the organization to process routine phone requests, including transfers, directory assistance, messaging and paging without live operators and with more ease-of-use than touch-tone menus. • Spok® Call Recording and Quality Management: Records, monitors, and scores operators’ conversations to allow for better management of calls, helping improve customer service and enables organizational compliance measures.
We currently have inventory and network equipment on hand that we believe will be sufficient to meet our wireless and software equipment requirements for the foreseeable future. Intellectual Property As of December 31, 2024, we held 82 trademarks and two patents, which we believe are important to protect our intellectual property. We have no pending trademarks or patents.
We currently have inventory and network equipment on hand that we believe will be sufficient to meet our wireless and software equipment requirements for the foreseeable future. Intellectual Property As of December 31, 2025, we held 81 trademarks and two patents, which we believe are important to protect our intellectual property. We have no pending trademarks or patents.
We also sell devices to resellers who lease or resell them to their subscribers and then sell messaging services utilizing our networks. Wireless products and services revenue represented 53%, 55% and 56% of total consolidated revenue for the years ended December 31, 2024, 2023 and 2022, respectively.
We also sell devices to resellers who lease or resell them to their subscribers and then sell messaging services utilizing our networks. Wireless products and services revenue represented 52%, 53% and 55% of total consolidated revenue for the years ended December 31, 2025, 2024 and 2023, respectively.
Operators can quickly and accurately perform directory searches and code calls, as well as messaging and paging by individuals, groups, and roles using the Spok Console’s computer telephony integration and directory capabilities. • Spok® Web Directory: Makes employee contact information more accessible and enables staff to send messages quickly right from the directory.
Operators can quickly and accurately perform directory searches and code calls, as well as message and page by individuals, groups, and roles using the Spok Console’s computer telephony integration and directory capabilities. • Spok® Web Directory: Makes employee contact information more accessible and enables staff to send messages quickly right from the directory.
These requests are reviewed and prioritized based on criteria that include the potential for increased revenue, customer/employee satisfaction, possible cost savings, and development time and expense.
These requests are reviewed and prioritized based on criteria that include the potential for increased revenue, customer/employee satisfaction, possible cost savings, ease of deployment and development time and expense.
As certain industries have been challenged during the pandemic, many organizations are motivated to reduce costs and 12 Table of Contents improve efficiencies while others attempt to enter new markets with complementary or divergent product offerings and drive growth.
As certain industries have been challenged during the pandemic, many organizations are motivated to reduce costs and improve efficiencies while others attempt to enter new markets with complementary or divergent product offerings and drive growth.
Hosted Solution • Spok Care Connect® Hosted Solution: Provides hospitals and healthcare systems with remote access to Spok Care Connect® solutions (currently Spok® Console, Spok® Web Directory, Spok® On-Call Scheduling and Spok Mobile®) and reduces the burden on information technology resources while providing immediate access to Spok solutions.
Hosted Solution • Spok Care Connect® Hosted Solution: For selected market segments, provides hospitals and healthcare systems with remote access to Spok Care Connect® solutions (currently Spok® Console, Spok® Web Directory, Spok® On-Call Scheduling and Spok Mobile®) and reduces the burden on information technology resources while providing immediate access to Spok solutions.
Selected competitors for portions of our product portfolio include: • Logility Inc. - Enterprise software solutions; • CareCloud, Inc. - Healthcare solutions; • Consensus Cloud Solutions - Cloud-based solutions; • DarioHealth - Healthcare solutions; • Domo, Inc. - Cloud-based solutions; • eGain Corporation - Cloud-based solutions; • Health Catalyst, Inc. - Healthcare data and analytics; • HealthStream, Inc. - Healthcare workforce solutions; • Kaltura, Inc. - Cloud-based solutions; • KORE Group Holdings Inc. - Mobile communications solutions; • LifeMD - Healthcare solutions; • OptimizeRx Corporation. - Healthcare solutions; • Sharecare - Healthcare solutions; • Synchronoss Technologies - Cloud-based solutions; • TruBridge - Healthcare solutions; and • Weave Communications, Inc. - Software solutions.
Selected competitors for portions of our product portfolio include: • CareCloud, Inc. - Healthcare solutions; • Consensus Cloud Solutions, Inc. - Cloud-based solutions; • Domo, Inc. - Cloud-based solutions; • eGain Corporation - Cloud-based solutions; • Health Catalyst, Inc. - Healthcare data and analytics; • HealthStream, Inc. - Healthcare workforce solutions; • Kaltura, Inc. - Cloud-based solutions; • KORE Group Holdings, Inc. - Mobile communications solutions; • LifeMD, Inc. - Healthcare solutions; • National Research Corporation - Healthcare solutions; • Ooma, Inc. - Communications solutions; • OptimizeRx Corporation. - Healthcare solutions; • Synchronoss Technologies, Inc. - Cloud-based solutions; • TruBridge, Inc. - Healthcare solutions; and • Weave Communications, Inc. - Software solutions.
Professional services revenue represented 13%, 11% and 9% of total consolidated revenue for the years ended December 31, 2024, 2023 and 2022, respectively.
Professional services revenue represented 16%, 13% and 11% of total consolidated revenue for the years ended December 31, 2025, 2024 and 2023, respectively.
Clinical Alerting • Spok® Messenger: Provides an intelligent, FDA-compliant, 510(k)-cleared solution that connects virtually all crucial alert systems, including nurse call, fire, security, patient monitoring, and building management to mobile staff via their wireless communication devices.
Clinical Alerting • Spok® Messenger: Provides an intelligent, FDA-compliant, 510(k)-cleared solution that connects virtually all crucial alert and monitoring systems, including nurse call, fire, security, patient monitoring, and building management to mobile staff via their wireless communication devices or other third-party solutions, as defined by the customer.
We offer a comprehensive suite of wireless messaging products and services focused on healthcare and "campus" type environments and critical mission notification. We will continue to focus on network reliability and customer service to help minimize the rate of revenue attrition.
We offer a comprehensive suite of wireless messaging products and services focused on healthcare and "campus" type environments and critical mission notification. We continue to focus on network reliability and customer service to help minimize the rate of revenue attrition. We recognize that the number of wireless subscribers, units in service, and the related revenue will likely continue to decline.
Most personal communication and other mobile phone devices currently sold in the United States are capable of sending and receiving one-way and two-way messages. Most subscribers that purchase these services no longer need to subscribe to a separate messaging service.
Many of these companies possess far greater financial, technical and other resources than we do. Most personal communication and other mobile phone devices currently sold in the United States are capable of sending and receiving one-way and two-way messages. Most subscribers that purchase these services no longer need to subscribe to a separate messaging service.
Professional services revenue increased in 2024, primarily as a result of an increase in the sales of managed services offering, as well as an increase in staffing levels to align with our backlog, which has grown as a result of our operations bookings results. 10 Table of Contents • Software License Updates and Product Support (Maintenance): Software license updates and product support, which is generally referred to as maintenance when sold to customers, is an important offering to customers who utilize our on-premise software solutions.
Professional services revenue increased in 2025, primarily as a result of an increase in the sales of our managed services offering, as well as an increase in staffing levels to align with our backlog. 10 Table of Contents • Software License Updates and Product Support (Maintenance and Subscription): Software license updates and product support, which is generally referred to as maintenance and subscription when sold to customers, is an important offering to customers who utilize our perpetual and term license arrangements.
This solution automatically delivers messages, collects responses, escalates issues to others, and logs all activities for reporting and analysis purposes. • Spok® Critical Test Results Notification: Automates and streamlines the process of delivering critical test results to the appropriate clinicians to help ensure patient safety.
This solution automatically delivers messages, collects responses, escalates issues to others, and logs all activities for reporting and analysis purposes. • Spok® Critical Test Results Notifications: Automates and streamlines the delivery of clinical test results to the appropriate clinicians, and manages alerts, including assigning certain alerts as critical, to help ensure patient safety.
We have relationships with several vendors to purchase new messaging devices. Used messaging devices are available in the secondary market from various sources. We believe existing inventory, returns of devices from customers that canceled wireless services, and purchases from other available sources of new and reconditioned devices will be sufficient to meet expected messaging device requirements for the foreseeable future.
We believe existing inventory, returns of devices from customers that canceled wireless services, and purchases from other available sources of new and reconditioned devices will be sufficient to meet expected messaging device requirements for the foreseeable future.
Given the uniqueness of the GenA pager, we believe its development is a key initiative that may help slow our wireless revenue attrition. Software Dependable clinical communications are paramount for individuals in healthcare and a host of other industries. We offer a number of solutions, providing our customers with the ability to communicate anywhere, anytime across a number of situations.
Given the uniqueness of the GenA pager, we believe its development is a key initiative that may help slow our wireless revenue attrition. Software Dependable critical clinical and operational communications are paramount for individuals and teams in healthcare and a host of other industries.
Sales We market and distribute our clinical communication and collaboration solutions through a direct sales force and an indirect sales channel. The direct sales force contracts or sells products, solutions, messaging services and other services directly to customers ranging from small and medium-sized businesses to companies in the Fortune 1000, as well as federal, state, and local government agencies.
The direct sales force contracts or sells products, solutions, messaging services and other services directly to customers ranging from small and medium-sized businesses to companies in the Fortune 1000, as well as federal, state, and local government agencies. We will continue to market primarily to commercial enterprises, with a focus on healthcare organizations, interested in our communication solutions.
Manage expenses - With our focus on generating cash flow, it is critical that we manage costs in alignment with our revenue. We will continue to look for ways to reduce our underlying cost structure, particularly if revenue declines.
Additionally, targeted enhancements of the Spok Mobile ® application will be critical in our ability to help further mitigate wireless customer attrition. Manage expenses - With our focus on generating cash flow, it is critical that we manage costs in alignment with our revenue. We continue to look for ways to reduce our underlying cost structure, particularly if revenue declines.
Our solutions help hospitals significantly increase the quality and safety of patient care delivery, while increasing patient and provider satisfaction and simultaneously increasing employee productivity, reducing costs and clinician burnout.
Our solutions help hospitals significantly increase the quality and safety of patient care delivery, while increasing patient and provider satisfaction and simultaneously increasing employee productivity, reducing costs and clinician burnout. This is accomplished through workflow enhancement; secure, reliable and integrated communication tools; and mobile accessibility.
The FCC’s rules require us to pay a variety of fees that increase our costs of doing business. For example, the FCC requires licensees, including Spok, to pay levies and fees, such as universal service fees, to cover the costs of certain regulatory programs and to promote various other societal goals.
For example, the FCC requires licensees, including Spok, to pay levies and fees, such as universal service fees, to cover the costs of certain regulatory programs and to promote various other societal goals. These requirements increase the cost of the services we provide.
We will continue to market primarily to commercial enterprises, with a focus on healthcare organizations, interested in our communication solutions. We maintain a sales presence in key markets throughout the United States, and in limited markets internationally through strategic partnerships, in an effort to gain new customers and to retain and increase sales to existing customers.
We maintain a sales presence in key markets throughout the United States, and in limited markets internationally through strategic partnerships, in an effort to gain new customers and to retain and increase sales to existing customers.
These foreign ownership restrictions limit the percentage of stockholders’ equity that may be owned or voted, directly or indirectly, by non-United States citizens or their representatives, foreign governments or their representatives, or foreign corporations. Our Amended and Restated Certificate of Incorporation permits the redemption of our equity from stockholders where necessary to ensure compliance with these requirements.
These foreign ownership restrictions limit the percentage of stockholders’ equity that may be owned or voted, directly or indirectly, by non-United States citizens or their representatives, foreign governments or their representatives, or foreign corporations.
We recognize that the number of wireless subscribers, units in service, and the related revenue will likely continue to decline. We intend to continue reducing our underlying cost structure impacting this declining wireless revenue stream by reducing payroll and related expenses as well as network related expenses where possible, alongside periodic price increases.
We intend to continue reducing our underlying cost structure impacting this declining wireless revenue stream by reducing payroll and related expenses as well as network related expenses where possible, alongside periodic price increases. We will integrate and consolidate operations as necessary to ensure the lowest cost operational platform for our consolidated business.
In addition to these select competitors, substantially larger companies in the electronic medical records space such as Epic Systems Corporation, Oracle Corporation, Athenahealth, Inc. and Veradigm, Inc. may choose to offer software-related solutions similar to our clinical communication and collaboration solutions or may acquire one of our competitors.
In addition to these select competitors, substantially larger companies in the electronic medical records space such as Epic Systems Corporation, Oracle Corporation, Athenahealth, Inc. and Veradigm, Inc. may choose to offer software-related solutions similar to our clinical communication and collaboration solutions or may acquire one of our competitors. 12 Table of Contents Furthermore, the healthcare sector continues to experience significant consolidation, in large part due to COVID-19, which has highlighted the need to improve patient outcomes, reduce the burden on providers and streamline operations.
We will integrate and consolidate operations as necessary to ensure the lowest cost operational platform for our consolidated business. Enhance existing software applications - We will continue to invest in the development and enhancement of our Spok Care Connect suite of products and services, at a similar rate consistent to the prior year.
Enhance existing software applications - We continue to invest in the development and enhancement of our Spok Care Connect suite of products and services, at a similar rate consistent to the prior year. Targeted enhancements and continued development efforts are critical to our ability to maintain our core software maintenance revenue and are necessary to drive future software operations revenue.
Largely all of our customers purchase maintenance when they purchase new software licenses, after which renewals generally occur on an annual basis and are paid in advance. Software license updates provide customers with rights to unspecified product upgrades, as well as maintenance and patch releases that are released during the term of the support period.
Largely all of our customers purchase maintenance and subscription when they purchase new perpetual and term licenses, after which renewals generally occur on an annual basis and are paid in advance.
Our wide-ranging customer base allows for low customer revenue concentration and as a result, no single customer accounted for more than 10% of our total revenues in 2024, 2023 or 2022.
Our wide-ranging customer base allows for low customer revenue concentration and as a result, no single customer accounted for more than 10% of our total revenues in 2025, 2024 or 2023. 11 Table of Contents We pursue close, long-term relationships with our customers because we believe strong customer relationships enable us to retain our current customer base and expand our services and revenue to that customer base.
Through targeted investments in these important and valuable business lines, we aim to reinvigorate growth in our legacy software solutions and minimize wireless revenue attrition.
Our Strategy We prioritize free cash flow generation and the return of capital to stockholders by maximizing revenue and cash generation from our established lines of business while effectively managing expenses. Through targeted investments in our important and valuable business lines, we aim to reinvigorate growth in our legacy software solutions and minimize wireless revenue attrition.
Within the wireless industry, companies compete on the basis of price, coverage area, services offered, transmission quality, network reliability and customer service. We compete by maintaining competitive pricing for our products and services, by providing broad coverage options through high-quality, reliable messaging networks and by providing quality customer service.
We compete by maintaining competitive pricing for our products and services, by providing broad coverage options through high-quality, reliable messaging networks and by providing quality customer service. Direct competitors for wireless messaging services include American Messaging Service, LLC and a variety of other regional and local providers.
Direct competitors for wireless messaging services include American Messaging Service, LLC and a variety of other regional and local providers. We also compete with a broad array of wireless messaging services provided by mobile telephone companies, including AT&T Mobility LLC,T-Mobile USA, Inc., and Verizon Wireless, Inc.
We also compete with a broad array of wireless messaging services provided by mobile telephone companies, including AT&T Mobility LLC, T-Mobile USA, Inc., and Verizon Wireless, Inc. This competition has intensified as prices for the services of mobile telephone companies have declined and messaging capabilities are generally available in today's mobile phone devices.
This solution integrates with the customers’ existing phone systems and is used by the operator group to answer incoming calls to the contact center.
Spok Care Connect® Platform Contact Center • Spok® Console: Provides operators with the information needed to process calls using their computers with just a few keystrokes. This solution integrates with the customers’ existing phone systems and is used by the operator group to answer incoming calls from internal or external callers to the contact center.
We generate wireless revenue from the sales of wireless messaging services, equipment, maintenance plans and/or equipment loss protection to both one-way and two-way messaging subscribers. We generate software revenue from the sale of our software solutions, including software licenses, professional services, equipment we procure from third parties, and post-contract support.
Sales and Marketing We offer a focused suite of unified clinical communication and collaboration solutions primarily to organizations in the healthcare sector. We generate wireless revenue from the sales of wireless messaging services, equipment, maintenance plans and/or equipment loss protection to both one-way and two-way messaging subscribers.
We offer our services and products to three major market segments: healthcare, government, and large enterprise, with a greater emphasis on the healthcare market segment. In February 2022, our Board of Directors announced a new strategic business plan. In accordance with this plan, in 2022, we discontinued Spok Go and successfully eliminated all associated costs.
We offer our services and products to three major market segments: healthcare, government, and large enterprise, with a greater emphasis on the healthcare market segment. Industry Overview The United States healthcare market continues to experience significant change.
Software license updates and product support revenue (i.e., Maintenance revenue) represented 27% of total consolidated revenue for each of the years ended December 31, 2024, 2023 and 2022. Sources of Equipment We do not manufacture the messaging devices our customers need to make use of our wireless services or the network equipment we use to provide wireless messaging services.
Perpetual and term license updates and product support revenue (i.e., Maintenance and subscription revenue) represented 26% of total consolidated revenue for the year ended December 31, 2025, and 27% for both of the years ended December 31, 2024 and 2023.
Our solutions are used for contact centers, clinical alerting and notification, mobile communications and messaging, and for public safety notifications. Spok Care Connect® Suite Contact Center • Spok® Console: Provides operators with the information needed to process calls using their computers with just a few keystrokes.
We offer a number of solutions, providing our customers with the ability to communicate anywhere, anytime across a number of situations. Our solutions are used for contact centers, clinical alerting, facility alerting and notification, mobile communications and messaging, and for public safety notifications.
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Since 2022, our focus has been and will continue to be on prioritizing generation of cash flow and maximizing revenue in our Spok Care Connec t ® and Wireless products and service lines. Industry Overview The United States healthcare market continues to experience significant change.
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We generate software revenue from the sale of our software solutions, including software licenses, professional services, equipment we procure from third parties, and post-contract support. 5 Table of Contents Sales We market and distribute our clinical communication and collaboration solutions through a direct sales force and an indirect sales channel.
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This is accomplished through workflow enhancement; secure, reliable and integrated communication tools; and mobile accessibility. 5 Table of Contents Sales and Marketing We offer a focused suite of unified clinical communication and collaboration solutions primarily to organizations in the healthcare sector.
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Perpetual and term license updates provide customers with rights to unspecified product upgrades, as well as maintenance and subscription and patch releases that are released during the term of the support period.
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Our Strategy In alignment with our strategic business plan announced in February 2022, our over-arching strategy has been, and will continue to be, the prioritization of free cash flow generation and the return of capital to stockholders, by maximizing revenue and cash generation from our established lines of business while effectively managing expenses.
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Sources of Equipment We do not manufacture the messaging devices our customers need to make use of our wireless services or the network equipment we use to provide wireless messaging services. We have relationships with several vendors to purchase new messaging devices. Used messaging devices are available in the secondary market from various sources.
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Targeted enhancements and continued development efforts are critical to our ability to maintain our core software maintenance revenue and are necessary to drive future software operations revenue. Additionally, targeted enhancements of the Spok Mobile ® application will be critical in our ability to help further mitigate wireless customer attrition.
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Our Amended and Restated Certificate of Incorporation permits the redemption of our equity from stockholders where necessary to ensure compliance with these requirements. 13 Table of Contents The FCC’s rules require us to pay a variety of fees that increase our costs of doing business.
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This competition has intensified as prices for the services of mobile telephone companies have declined and messaging capabilities are generally available in today's mobile phone devices. Many of these companies possess far greater financial, technical and other resources than we do.
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Furthermore, the healthcare sector continues to experience significant consolidation, in large part due to COVID-19, which has highlighted the need to improve patient outcomes, reduce the burden on providers and streamline operations.
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These requirements increase the cost of the services we provide.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

26 edited+3 added−3 removed149 unchanged
Biggest changeWe have significant deferred income tax assets that are available to offset future taxable income and increase cash flows from operations. The use of these deferred income tax assets is dependent on the availability of taxable income in future periods.
Biggest changeWe have significant deferred income tax assets, including net operating loss ("NOL") carryforwards, that are available to offset future taxable income and increase cash flows from operations. Our ability to realize these benefits depends on generating sufficient taxable income before expiration and avoiding limitations under Section 382 of the Internal Revenue Code ("IRC").
Adverse economic conditions could increase the rate of gross subscriber cancellations and/or the level of revenue erosion for our wireless business and could cause delays in or 17 Table of Contents the loss of software revenue or bookings, which impacts license, professional services, hardware and subscription revenues.
Adverse economic conditions could increase the rate of gross subscriber cancellations and/or the level of 17 Table of Contents revenue erosion for our wireless business and could cause delays in or the loss of software revenue or bookings, which impacts license, professional services, hardware and subscription revenues.
Any cyberattack or incident that compromises the confidentiality, integrity or availability of IT Systems or Confidential Information, for example, the theft, misuse of, or unauthorized access to Confidential Information, could result in, among other things, unfavorable publicity, damage to our reputation, loss of our trade secrets and other competitive information, difficulty in marketing our products, increased costs of investigation, remediation and compliance, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties (including class actions) and possible financial obligations for liabilities and damages related to the theft or misuse of such information, regulatory investigations and enforcement actions, as well as fines and other sanctions pursuant to data privacy and security rules and regulations, any or all of which could have a material adverse effect on our reputation, operations, business, profitability and financial condition.
A significant cyberattack or incident that compromises the confidentiality, integrity or availability of IT Systems or Confidential Information, for example, the theft, misuse of, or unauthorized access to Confidential Information, could result in, among other things, unfavorable publicity, damage to our reputation, loss of our trade secrets and other competitive information, difficulty in marketing our products, increased costs of investigation, remediation and compliance, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties (including class actions) and possible financial obligations for liabilities and damages related to the theft or misuse of such information, regulatory investigations and enforcement actions, as well as fines and other sanctions pursuant to data privacy and security rules and regulations, any or all of which could have a material adverse effect on our reputation, operations, business, profitability and financial condition.
Disruptions or volatility in credit markets may impede our access to capital markets, including higher borrowing costs, less available capital, more stringent terms and tighter covenants may limit our ability to finance acquisitions.
Disruptions or volatility in credit markets may impede our access to capital markets, including higher borrowing costs, less available capital, more stringent terms and tighter covenants, which may limit our ability to finance acquisitions.
Each month, we need to spend substantial time, effort, and expense on our marketing and sales efforts that may not result in future revenue. We may be unable to find vendors that are able to supply us with wireless paging equipment based on future demands. We purchase paging equipment from third-party vendors.
Each month, we need to spend substantial time, effort, and expense on our marketing and sales efforts that may not result in future revenue. We may be unable to find vendors that are able to supply us with wireless paging equipment based on future demand. We purchase paging equipment from third-party vendors.
The accounting for deferred income tax assets is based upon an estimate of future results, and any valuation allowance we may apply to our deferred tax assets may be increased or decreased as conditions change or if we are unable to implement certain tax planning strategies.
The accounting for deferred income tax assets is based upon an estimate of future results, and any valuation allowance we may apply to our deferred tax assets may be increased or decreased as conditions change, tax laws or interpretations change, or if we are unable to implement certain tax planning strategies.
ITEM 1A. RISK FACTORS The following important factors, among others, could cause our actual operating results to differ materially from those indicated or suggested by forward-looking statements made in this 2024 Form 10-K or presented elsewhere by management from time to time.
ITEM 1A. RISK FACTORS The following important factors, among others, could cause our actual operating results to differ materially from those indicated or suggested by forward-looking statements made in this 2025 Form 10-K or presented elsewhere by management from time to time.
For example, the FCC issued an order in October 2007 that mandated paging carriers (including the Company) along with all other CMRS providers serving a defined minimum number of subscribers to maintain an emergency back-up power supply at all cell sites to enable operation for a minimum of eight hours in the event of a loss of commercial power (the "Back-up Power Order").
For example, the FCC issued an order in October 2007 that mandated paging carriers (including the Company) along with all other CMRS providers serving a defined minimum number of subscribers to maintain an emergency back-up power supply at all cell sites to enable operation for a minimum of eight hours in the event of a loss of commercial power (the 24 Table of Contents "Back-up Power Order").
These statutes and related regulations impose numerous requirements 23 Table of Contents regarding the use and disclosure of personal health information with which we and our software solutions must comply. Our failure to accurately anticipate or interpret these complex and technical laws and regulations could subject us to civil and/or criminal liability.
These statutes and related regulations impose numerous requirements regarding the use and disclosure of personal health information with which we and our software solutions must comply. Our failure to accurately anticipate or interpret these complex and technical laws and regulations could subject us to civil and/or criminal liability.
To the extent that anticipated reductions in wireless operating expenses do not occur or sufficient revenue is not generated, we may not achieve sufficient taxable income to allow for use of our deferred income tax assets.
To the extent that anticipated reductions in wireless operating expenses do not occur or sufficient revenue is not generated, we may not achieve sufficient taxable income to allow for use of our deferred income tax assets before they expire.
We may experience a long sales cycle for our software products. Our software revenue growth results from a long sales cycle that from initial contact to final sales order may take six to 18 months, depending on the type of software solution.
We experience a long sales cycle for our software products. Our software revenue growth results from a long sales cycle that from initial contact to final sales order takes six to 18 months, depending on the type of software solution.
We use channel partners, such as resellers, consulting firms, original equipment manufacturers, and technology partners, to license and support our products.
We use channel partners, such as resellers, consulting firms, original equipment manufacturer, and technology partners, to license and support our products.
We are also dependent on a number of third-party providers of various technology, tools and services relating to, among other things, human resources, electronic communications, data storage, finance, and other business functions, and we are, of necessity, dependent on the security systems of these providers.
We are also dependent on a number of third-party providers of various technology, tools and services relating to, among other things, human resources, electronic communications, data storage, finance, and other business functions, and we are, of necessity, dependent on but do not control the security systems of these providers.
If we are unable to use these deferred income tax assets, our financial condition and results of operations may be materially affected. In addition, a significant portion of our deferred income tax assets relate to net operating losses.
If we are unable to use these deferred income tax assets, our financial condition and results of operations may be materially affected. In addition, a significant portion of our deferred income tax assets relate to NOLs.
Our software solutions may therefore handle or have access to personal health information subject in the United States to HIPAA, HITECH and related regulations as well as legislation and regulations in foreign countries.
Our software solutions may therefore handle or have access to personal health information subject in the United States to HIPAA, HITECH and related regulations as well 23 Table of Contents as legislation and regulations in foreign countries.
Ultimately, after a hearing by the United States Court of Appeals for the DC Circuit and 24 Table of Contents disapproval by the Office of Management and Budget (the "OMB") of the information collection requirements of the Back-up Power Order, the FCC indicated that it would not seek to override the OMB’s disapproval.
Ultimately, after a hearing by the United States Court of Appeals for the D.C. Circuit and disapproval by the Office of Management and Budget (the "OMB") of the information collection requirements of the Back-up Power Order, the FCC indicated that it would not seek to override the OMB’s disapproval.
Our business is sensitive to recessionary economic cycles, higher interest rates, inflation, higher levels of unemployment, higher tax rates and other changes in tax laws, or other economic factors that may affect business spending or buying habits that could adversely affect the demand for our services.
Our business is sensitive to recessionary economic cycles, the impact of trade disputes, tariffs and other trade protection measures, higher interest rates, inflation and higher levels of unemployment, higher tax rates and other changes in tax laws, or other economic factors that may affect business spending or buying habits that could adversely affect the demand for our services.
In addition, computer viruses, malware (for example, ransomware) or security vulnerabilities in our or our service providers' data, software, products or services, as well as external cyberattacks and data breaches, expose us to the risks of material corruption, loss, and misappropriation of proprietary and confidential information.
In addition, we are vulnerable to computer viruses, malware (for example, ransomware) and both known and unknown security vulnerabilities in our or our service providers' data, software, products or services, as well as external cyberattacks and data breaches that expose us to the risks of material corruption, loss, and misappropriation of proprietary and confidential information.
There is no assurance that we will remain immune to this litigation. Any such claims, whether meritorious or not, could be time-consuming and costly in terms of both resources and management time. We may receive claims that we have infringed the intellectual property rights of others, including claims regarding patents, copyrights, and trademarks.
Litigation can be protracted, expensive, and time consuming. There is no assurance that litigation will not materially impact us. Any such claims, whether meritorious or not, could be time-consuming and costly in terms of both resources and management time. We may receive claims that we have infringed the intellectual property rights of others, including claims regarding patents, copyrights, and trademarks.
We may experience litigation claiming intellectual property infringement by us, and we may not be able to protect our rights in intellectual property that we own and develop. Intellectual property infringement litigation has become commonplace, particularly in the wireless and software industries in which we operate. Litigation can be protracted, expensive, and time consuming.
We may experience material litigation claiming intellectual property infringement by us, and we may not be able to protect our rights in intellectual property that we own and develop. Intellectual property infringement litigation has become commonplace, particularly in the wireless and software industries in which we operate, and from time to time we are involved in intellectual property disputes.
From time to time, it may be necessary to reorient our sales representatives to focus on specific market segments, product lines or new software solutions or to remove underperforming individuals, which may require additional resources to maintain productivity. The impact of these changes could adversely impact our ability to achieve our sales productivity goals.
From time to time, we have needed to reorient our sales representatives to focus on specific market segments, product lines or new software solutions or to remove underperforming individuals, which has required and in the future may require additional resources to maintain productivity. The impact of these changes could adversely impact our ability to achieve our sales productivity goals.
Our portfolio of issued patents and copyrights may be insufficient to defend ourselves against intellectual property infringement claims, and the validity and scope of our patents could be challenged by third parties were we to seek to enforce them. Risks Related to Technology Our use of open source software, third-party software and other intellectual property may expose us to risks.
Our portfolio of issued patents and copyrights may be insufficient to defend ourselves against material intellectual property infringement claims, and the validity and scope of our patents could be challenged by third parties were we to seek to enforce them.
UNRESOLVED STAFF COMMENTS We had no unresolved SEC staff comments as of February 27, 2025.
UNRESOLVED STAFF COMMENTS We had no unresolved SEC staff comments as of February 26, 2026.
We license and integrate certain software components from third parties into our software, and we expect to continue to use third-party software in the future.
Risks Related to Technology Our use of open source software, third-party software and other intellectual property may expose us to risks. We license and integrate certain software components from third parties into our software, and we expect to continue to use third-party software in the future.
For example, we maintained a valuation allowance of $2.3 million at December 31, 2024 and 2023 to reduce net deferred income tax assets as their realization did not meet the applicable more-likely-than-not criterion. If our long-lived assets or goodwill become impaired, we may be required to record significant impairment charges.
For example, we had a valuation allowance of $1.9 million and $2.3 million at December 31, 2025 and 2024, respectively, to reduce net deferred income tax assets as their realization did not meet the applicable more-likely-than-not criterion.
The outcome of this case is uncertain, but a decision by the Supreme Court invalidating the FCC’s universal service contribution mechanism could impact our business. As another example, in 2020, the FCC made available for broadband use spectrum in the 900 MHz band that is adjacent to certain frequencies used by us to provide paging services.
As another example, in 2020, the FCC made available for broadband use spectrum in the 900 MHz band that is adjacent to certain frequencies used by us to provide paging services.
Removed
We and our service providers are routinely subjected to cyberattacks, such as denial of service, attempted unauthorized network intrusions, malware, viruses, social engineering (phishing), ransomware attacks or other persistent cyber threats.
Added
Any integration of artificial intelligence in our or any third-party provider’s operations, products or services is expected to pose new or unknown cybersecurity risks. We and our service providers regularly experience cyberattacks and other incidents, and we expect that attacks and incidents will continue in varying degrees.
Removed
If our ability to utilize these losses is limited, due to Internal Revenue Code ("IRC") Section 382, our financial condition and results of operations may be materially affected.
Added
For example, we have experienced distributed denial of service (DDoS) attacks, social engineering/phishing/business email compromise (BEC) attacks, supply chain attacks, malware, and attacks on various of our third-party service providers. While to date no attacks or incidents have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.
Removed
In addition, the FCC’s universal service contribution mechanism has been the subject of several recent court challenges, and the United States Supreme Court has agreed to consider the validity of the methodology on constitutional and other grounds.
Added
In addition, if we use all of our deferred income tax assets, those benefits will not be available for future periods, which would negatively impact our financial condition and results of operations in such future periods. If our long-lived assets or goodwill become impaired, we may be required to record significant impairment charges.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe CIO/CISO has over two decades of experience directing security programs, controls, policies and operationalizing them specific to the healthcare industry. The VP Technology Operations has over a decade of experience managing the Cybersecurity Program, SOC2 audits and security controls and policies.
Biggest changeThe CIO/CISO is a member of, and reports to, the executive management team, who is ultimately charged with implementing and enforcing the Company's cybersecurity risk management program. The CIO/CISO has over a decade of experience managing the Cybersecurity Program, SOC2 audits and security controls and policies.
Cybersecurity is part of our Board of Directors' oversight function. Our Board of Directors has delegated oversight of cybersecurity and other information technology to its Audit Committee. Our Audit Committee receives regular reporting from executive management on our cybersecurity risks and, as necessary, updates on cybersecurity incidents.
Cybersecurity is part of our Board of Directors' oversight function. Our Board of Directors has delegated oversight of cybersecurity and other information technology to its Audit Committee. Our Audit Committee receives regular reporting from executive management, including the CIO/CISO on our cybersecurity risks and, as necessary, updates on cybersecurity incidents.
Executive management, including our Chief Information Officer (CIO)/Chief Information Security Officer (CISO) and VP Technology Operations, has overall responsibility for assessing and managing key cybersecurity risks; implementation of the Cybersecurity Program is led by key information technology and security management members, including the CIO/CISO and VP Technology Operations, who have specialized training, and various certifications in information technology and cybersecurity strategy, tools and governance.
Our Chief Information Officer (CIO)/Chief Information Security Officer (CISO) has overall responsibility for assessing and managing key cybersecurity risks; implementation of the Cybersecurity Program is led by the CIO/CISO, who has specialized training, and various certifications in information technology and cybersecurity strategy, tools and governance.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAt December 31, 2024, we leased facility space, i ncluding our corporate headquarters, sales offices, technical facilities, warehouse and storage facilities in 39 locations in 23 states in the United States. The total leased space is approximately 51,000 square feet. At December 31, 2024, we owned three small parcels of land in three states in the United States.
Biggest changeAt December 31, 2025, we leased facility space, i ncluding our corporate headquarters, sales offices, technical facilities, and warehouse and storage facilities in 36 locations in 23 states in the United States. The total leased space is approximately 50,000 square feet. At December 31, 2025, we owned three small parcels of land in three states in the United States.
At December 31, 2024, we leased transmitter sites on commercial broadcast towers, buildings and other fixed structures, some of which are free of charge, in approximately 2,521 locations throughout the United States. These leases are for our active transmitters and are for various terms and provide for periodic lease payments at various rates.
At December 31, 2025, we leased transmitter sites on commercial broadcast towers, buildings and other fixed structures, some of which are free of charge, in approximately 2,379 locations throughout the United States. These leases are for our active transmitters and are for various terms and provide for periodic lease payments at various rates.
At December 31, 2024, we had 3,048 active transmitters on leased sites which provide service to our customers.
At December 31, 2025, we had 2,869 active transmitters on leased sites which provide service to our customers.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDecember 31, 2019 2020 2021 2022 2023 2024 Spok Holdings, Inc. $ 100.00 $ 95.65 $ 84.40 $ 87.03 $ 181.58 $ 203.66 NASDAQ Composite 100.00 144.92 177.06 119.45 172.77 223.87 S&P Composite 1500 Health Care Technology Index 100.00 118.47 140.91 109.81 118.85 130.27 Purchases of Equity Securities by the Issuer and Affiliated Purchasers No common stock was repurchased by the Company (excluding the purchase of common stock for tax withholdings) during the three months ended December 31, 2024. 28 Table of Contents Repurchased shares of our common stock are accounted for as a reduction to common stock and additional paid-in-capital in the period in which the repurchase occurs.
Biggest changeDecember 31, 2020 2021 2022 2023 2024 2025 Spok Holdings, Inc. $ 100.00 $ 88.23 $ 90.99 $ 189.84 $ 212.92 $ 189.61 NASDAQ Composite 100.00 122.18 82.43 119.22 154.48 187.14 S&P Composite 1500 Health Care Technology Index 100.00 117.68 100.32 72.99 80.11 70.05 Purchases of Equity Securities by the Issuer and Affiliated Purchasers No shares of common stock were repurchased by the Company (excluding the purchase of common stock for tax withholdings) during the three months ended December 31, 2025. 28 Table of Contents Repurchased shares of our common stock are accounted for as a reduction to common stock and additional paid-in-capital in the period in which the repurchase occurs.
Based on publicly available information and after considering any direct knowledge we may have, our combined cumulative change in ownership was an insignificant amount as of December 31, 2024 and 2023. ITEM 6. [RESERVED]
Based on publicly available information and after considering any direct knowledge we may have, our combined cumulative change in ownership was an insignificant amount as of December 31, 2025 and 2024. ITEM 6. [RESERVED]
This cash dividend of approximately $6.4 million is expected to be paid from available cash on hand. 27 Table of Contents Performance Graph We began trading on the NASDAQ National Market ® on November 17, 2004.
This cash dividend of approximately $6.5 million is expected to be paid from available cash on hand. 27 Table of Contents Performance Graph We began trading on the NASDAQ National Market ® on November 17, 2004.
The stock performance depicted on the chart represents historical stock performance and is not necessarily indicative of future stock price performance. *$100 invested on 12/31/2019 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
The stock performance depicted on the chart represents historical stock performance and is not necessarily indicative of future stock price performance. *$100 invested on 12/31/2020 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
The chart assumes that $100 was invested in our common stock and in each of the indices on December 31, 2019. The comparisons assume that all cash distributions were reinvested.
The chart assumes that $100 was invested in our common stock and in each of the indices on December 31, 2020. The comparisons assume that all cash distributions were reinvested.
The chart below compares the relative changes in the cumulative total return of our common stock for the period of December 31, 2019 to December 31, 2024, against the cumulative total return of the NASDAQ Composite Index ® and the S&P Composite 1500 Health Care Technology Index for the same period.
The chart below compares the relative changes in the cumulative total return of our common stock for the period of December 31, 2020 to December 31, 2025, against the cumulative total return of the NASDAQ Composite Index ® and the S&P Composite 1500 Health Care Technology Index for the same period.
The chart indicates the dollar value of each hypothetical $100 investment based on the closing price as of the last trading day of each fiscal year from December 31, 2019 to December 31, 2024.
The chart indicates the dollar value of each hypothetical $100 investment based on the closing price as of the last trading day of each fiscal year from December 31, 2020 to December 31, 2025.
On February 26, 2025, the Board of Directors declared a regular quarterly cash dividend of $0.3125 per share of common stock, with a record date of March 14, 2025, and a payment date of March 31, 2025.
On February 25, 2026, the Board of Directors declared a regular quarterly cash dividend of $0.3125 per share of common stock, with a record date of March 16, 2026, and a payment date of March 31, 2026.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our sole class of common equity is our $0.0001 par value common stock, which is listed on the NASDAQ National Market ® and is traded under the symbol "SPOK." Holders of Common Stock 26 Table of Contents As of February 21, 2025, there were 2,607 holders of record of our common stock.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our sole class of common equity is our common stock, $0.0001 par value per share, which is listed on the NASDAQ National Market ® and is traded under the symbol "SPOK." Holders of Common Stock As of February 20, 2026, there were 2,535 holders of record of our common stock.
Dividends The Company declared dividends totaling $26.8 million, $26.2 million and $25.8 million during the years ended December 31, 2024, 2023 and 2022, respectively.
Dividends The Company declared dividends totaling $26.8 million during the years ended December 31, 2025 and 2024 and $26.2 million during the year ended December 31, 2023.
The following table details information on our dividends declared and cash distributions since the formation of the Company in 2005 through the year ended December 31, 2024: (Dollars in Thousands) Dividends Declared Per Share Amount Total Payment (1) Year Prior to 2020 $ 19.775 $ 487,150 2020 0.500 9,771 2021 0.500 10,025 2022 1.250 25,011 2023 1.250 25,642 2024 1.250 26,381 $ 24.525 $ 583,980 (1) The total payment reflects the cash distributions paid in relation to common stock, vested RSUs and vested shares of restricted stock.
The following table details information on our dividends declared and cash distributions since the formation of the Company in 2005 through the year ended December 31, 2025: (Dollars in Thousands) Dividends Declared Per Share Amount Total Payment (1) Year Prior to 2021 $ 20.275 $ 496,921 2021 0.500 10,025 2022 1.250 25,011 2023 1.250 25,642 2024 1.250 26,381 2025 1.250 27,259 $ 25.775 $ 611,239 (1) The total payment reflects the cash distributions paid in relation to common stock, vested RSUs and vested shares of restricted stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor a discussion and analysis of the year ended December 31, 2023, compared to the year ended December 31, 2022, please refer to Management's Discussion and Analysis of Financial Condition and Results of Operations included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 22, 2024: (Dollars in thousands) 2024 Change 2023 Change 2022 Revenue: Wireless revenue $ 73,523 $ (2,445) (3.2) % $ 75,968 $ 346 0.5 % $ 75,622 Software revenue 64,130 1,073 1.7 % 63,057 4,145 7.0 % 58,912 Total revenue 137,653 (1,372) (1.0) % 139,025 4,491 3.3 % 134,534 Operating expenses: Cost of revenue (exclusive of items shown separately below) 28,430 1,612 6.0 % 26,818 (1,449) (5.1) % 28,267 Research and development 11,548 999 9.5 % 10,549 (3,076) (22.6) % 13,625 Technology operations 24,306 (1,537) (5.9) % 25,843 (1,569) (5.7) % 27,412 Selling and marketing 15,851 (499) (3.1) % 16,350 54 0.3 % 16,296 General and administrative 33,301 133 0.4 % 33,168 (4,628) (12.2) % 37,796 Severance and restructuring 1,104 531 92.7 % 573 (6,756) (92.2) % 7,329 Depreciation and accretion 4,148 (348) (7.7) % 4,496 925 25.9 % 3,571 Total operating expenses 118,688 891 0.8 % 117,797 (16,499) (12.3) % 134,296 Operating income 18,965 (2,263) (10.7) % 21,228 20,990 8,819.3 % 238 Interest income 1,153 54 4.9 % 1,099 507 85.6 % 592 Other (expense) income (86) (84) 4,200.0 % (2) (169) (101.2) % 167 Income before income taxes 20,032 (2,293) (10.3) % 22,325 21,328 2,139.2 % 997 (Provision for) benefit from income taxes (5,067) 1,592 (23.9) % (6,659) (27,518) (131.9) % 20,859 Net income $ 14,965 $ (701) (4.5) % $ 15,666 $ (6,190) (28.3) % $ 21,856 Supplemental Information FTEs 410 26 6.8 % 384 8 2.1 % 376 Active transmitters 3,048 (167) (5.2) % 3,215 (110) (3.3) % 3,325 30 Table of Contents Revenue We offer a focused suite of unified clinical communications and collaboration solutions that include call center applications, clinical alerting and notifications, one-way and advanced two-way wireless messaging services, mobile communications and public safety solutions.
Biggest changeFor a discussion and analysis of the year ended December 31, 2024, compared to the year ended December 31, 2023, please refer to Management's Discussion and Analysis of Financial Condition and Results of Operations included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025: (Dollars in thousands) 2025 Change 2024 Change 2023 Revenue: Wireless revenue $ 72,522 $ (1,001) (1.4) % $ 73,523 $ (2,445) (3.2) % $ 75,968 Software revenue 67,186 3,056 4.8 % 64,130 1,073 1.7 % 63,057 Total revenue 139,708 2,055 1.5 % 137,653 (1,372) (1.0) % 139,025 Operating expenses: Cost of revenue (exclusive of items shown separately below) 29,785 1,078 3.8 % 28,707 1,613 6.0 % 27,094 Research and development 12,216 522 4.5 % 11,694 1,010 9.5 % 10,684 Technology operations 24,603 (1,032) (4.0) % 25,635 (1,510) (5.6) % 27,145 Selling and marketing 17,703 1,483 9.1 % 16,220 (526) (3.1) % 16,746 General and administrative 31,804 624 2.0 % 31,180 121 0.4 % 31,059 Severance and restructuring 458 (646) (58.5) % 1,104 531 92.7 % 573 Depreciation and accretion 3,429 (719) (17.3) % 4,148 (348) (7.7) % 4,496 Total operating expenses 119,998 1,310 1.1 % 118,688 891 0.8 % 117,797 Operating income 19,710 745 3.9 % 18,965 (2,263) (10.7) % 21,228 Interest income 820 (333) (28.9) % 1,153 54 4.9 % 1,099 Other income (expense) 912 998 (1,160.5) % (86) (84) 4,200.0 % (2) Income before income taxes 21,442 1,410 7.0 % 20,032 (2,293) (10.3) % 22,325 Provision for income taxes (5,561) (494) 9.7 % (5,067) 1,592 (23.9) % (6,659) Net income $ 15,881 $ 916 6.1 % $ 14,965 $ (701) (4.5) % $ 15,666 Supplemental Information FTEs 421 11 2.7 % 410 26 6.8 % 384 Active transmitters 2,869 (179) (5.9) % 3,048 (167) (5.2) % 3,215 Certain amounts in the Consolidated Financial Statements, for the years ended December 31, 2024 and 2023, have been reclassified to conform to the current presentation for the year ended December 31, 2025.
This assessment is required to determine whether, based on all available evidence, it is "more likely than not" (meaning a probability of greater than 50%) that all or some portion of our deferred income tax assets will be realized in future periods.
This assessment is required to determine whether, based on all available evidence, it is "more likely than not" (meaning a probability of greater than 50%) that all or some portion of our deferred income tax assets will be realized in future periods.
Generally, we use the time-elapsed measure of progress for performance obligations that include wireless, maintenance, professional services - managed services, or subscription services. We believe this method best depicts the simultaneous transfer and consumption of the benefit based on our performance as these services are generally considered standby services.
Generally, we use the time-elapsed measure of progress for performance obligations that include wireless, maintenance, professional services - managed services and subscription services. We believe this method best depicts the simultaneous transfer and consumption of the benefit based on our performance as these services are generally considered standby services.
The estimated control premium is based on a review of current and past market information published by a third-party resource, assessment of the Company's future projected discounted cash flows and other relevant information if available. Our methods, assumptions, and estimates used in assessing goodwill in a quantitative form remained materially unchanged in 2024.
The estimated control premium is based on a review of current and past market information published by a third-party resource, assessment of the Company's future projected discounted cash flows and other relevant information if available. Our methods, assumptions, and estimates used in assessing goodwill in a quantitative form remained materially unchanged in 2025.
As part of this evaluation, for the year ended December 31, 2024, the Company did not identify any probable losses. Related Parties Refer to Note 12, "Related Parties" in the Notes to Consolidated Financial Statements for further discussion on our related party transactions. Inflation Inflation has not had a material effect on our operations to date.
As part of this evaluation, for the year ended December 31, 2025, the Company did not identify any probable losses. Related Parties Refer to Note 12, "Related Parties" in the Notes to Consolidated Financial Statements for further discussion on our related party transactions. Inflation Inflation has not had a material effect on our operations to date.
Based on current and anticipated levels of operations, we anticipate that net cash provided by operating activities, together with the available cash on hand at December 31, 2024, should be adequate to meet anticipated cash requirements for the short term (next 12 months) and long term (beyond 12 months).
Based on current and anticipated levels of operations, we anticipate that net cash provided by operating activities, together with the available cash on hand at December 31, 2025, should be adequate to meet anticipated cash requirements for the short term (next 12 months) and long term (beyond 12 months).
Similar to our quarterly assessment of goodwill, significant judgment is required in the determination of a triggering event given the qualitative nature of the assessment. We did not identify any triggering events for long-lived assets in 2024. We did not record any impairment of long-lived assets for the years ended December 31, 2024 and 2023.
Similar to our quarterly assessment of goodwill, significant judgment is required in the determination of a triggering event given the qualitative nature of the assessment. We did not identify any triggering events for long-lived assets in 2025. We did not record any impairment of long-lived assets for the years ended December 31, 2025 and 2024.
We recorded no impairment of goodwill for the years ended December 31, 2024, 2023 and 2022. Quarterly, we assess whether circumstances exist which suggest that the carrying value of long-lived assets (asset groups) may not be recoverable.
We recorded no impairment of goodwill for the years ended December 31, 2025, 2024 and 2023. Quarterly, we assess whether circumstances exist which suggest that the carrying value of long-lived assets (asset groups) may not be recoverable.
There were no remaining amortizable intangible assets at December 31, 2024 and 2023. Recent Accounting Pronouncements Refer to Note 2, "Recent Accounting Standards," in the Notes to Consolidated Financial Statements for a summary of recent and pending accounting standards.
There were no remaining amortizable intangible assets at December 31, 2025 and 2024. Recent Accounting Pronouncements Refer to Note 2, "Recent Accounting Standards," in the Notes to Consolidated Financial Statements for a summary of recent and pending accounting standards.
Any inability to access or delay in accessing these funds could adversely affect our business, financial condition and results of operations. We maintain a level of liquidity sufficient to allow us to meet our cash needs in both the short term (next 12 months) and long term (beyond 12 months).
Any inability to access or delay in accessing these funds could adversely affect our business, financial condition and results of operations. 35 Table of Contents We maintain a level of liquidity sufficient to allow us to meet our cash needs in both the short term (next 12 months) and long term (beyond 12 months).
We also sell devices to resellers who lease or resell such devices to their subscribers and then sell messaging services utilizing our networks. 31 Table of Contents A subscriber to one-way messaging services may select coverage on a local, regional or nationwide basis to best meet their messaging needs, while two-way messaging is generally offered on a nationwide basis.
We also sell devices to resellers who lease or resell such devices to their subscribers and then sell messaging services utilizing our networks. A subscriber to one-way messaging services may select coverage on a local, regional or nationwide basis to best meet their messaging needs, while two-way messaging is generally offered on a nationwide basis.
We provide a valuation allowance when we consider it "more likely than not" that a deferred income tax asset will not be fully recovered. The assessment of our deferred income tax assets requires significant judgment, however, our methods, assumptions, and estimates used in assessing the need for a valuation allowance remained 39 Table of Contents materially unchanged in 2024.
We provide a valuation allowance when we consider it "more likely than not" that a deferred income tax asset will not be fully recovered. The assessment of our deferred income tax assets requires significant judgment, however, our methods, assumptions, and estimates used in assessing the need for a valuation allowance remained materially unchanged in 2025.
Changes in deferred income tax assets and liabilities are included as a component of deferred income tax expense. Deferred income tax assets represent amounts available to reduce future income taxes payable.
Changes in deferred income tax 38 Table of Contents assets and liabilities are included as a component of deferred income tax expense. Deferred income tax assets represent amounts available to reduce future income taxes payable.
This classification generally consists of depreciation from capital expenditures or other assets that are core to our ongoing operations and accretion of asset retirement obligations. 34 Table of Contents The following is a review of our operating expense categories for the years ended December 31, 2024 and 2023.
This classification generally consists of depreciation from capital expenditures or other assets that are core to our ongoing operations and accretion of asset retirement obligations. The following is a review of our operating expense categories for the years ended December 31, 2025 and 2024.
Market conditions can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all.
In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all.
Wireless revenue decreased for the year ended December 31, 2024, as compared to 2023, reflective of the secular decrease in our wireless units in service, from approximately 765 thousand units as of December 31, 2023 to approximately 720 thousand units as of December 31, 2024.
Wireless revenue decreased for the year ended December 31, 2025, as compared to 2024, reflective of the secular decrease in our wireless units in service, from approximately 720 thousand units as of December 31, 2024 to approximately 675 thousand units as of December 31, 2025.
Cost of Revenue Cost of revenue increased by $1.6 million, or 6.0%, for the year ended December 31, 2024, compared to 2023 . This increase was primarily driven by the need for additional professional services personnel to better align staffing levels with our backlog.
Cost of revenue: increased by $1.1 million, or 3.8%, for the year ended December 31, 2025, compared to 2024 . This increase was primarily driven by the need for additional professional services personnel to better align staffing levels with our backlog.
We maintained a valuation allowance of $2.3 million related to federal foreign tax credits and certain state net operating losses and state tax credits, as we do not believe current projections of future taxable income will be sufficient to utilize those tax assets and credits prior to expiration.
We maintained a valuation allowance of $1.9 million and $2.3 million as of December 31, 2025 and 2024, respectively, related to federal foreign tax credits and certain state net operating losses and state tax credits, as we do not believe current projections of future taxable income will be sufficient to utilize those tax assets and credits prior to expiration.
These operating expenses are categorized as follows: • Cost of Revenue. These are expenses we incur for the delivery of products and services to our customers and consist primarily of hardware, third-party software, outside services expenses and payroll and related expenses for our professional services, logistics, customer support and maintenance staff. • Research and Development.
These are expenses we incur for the delivery of products and services to our customers and consist primarily of hardware, third-party software, outside services expenses and payroll and related expenses for our professional services, logistics, customer support and maintenance staff. • Research and Development.
Operations Revenue Software operations revenue increased during 2024 when compared to 2023, primarily as a result of higher professional services revenue, resulting from increased sales of our managed services offering as well as targeted hiring efforts over the last 12 months, as we aligned staffing levels with our backlog, which had grown as a result of our operations bookings results.
Software revenue increased during 2025 when compared to 2024, primarily as a result of higher professional services revenue, resulting from increased sales of our managed services offering as well as targeted hiring efforts over the last 12 months, as we aligned staffing levels with our backlog.
On February 26, 2025, the Board of Directors declared a regular quarterly cash dividend of $0.3125 per share of common stock, with a record date of March 14, 2025 and a payment date of March 31, 2025. This cash dividend of approximately $6.4 million is expected to be paid from available cash on hand.
On February 25, 2026, the Board of Directors declared a regular quarterly cash dividend of $0.3125 per share of common stock, with a record date of March 16, 2026 and a payment date of March 31, 2026. This cash dividend of approximately $6.5 million is expected to be paid from available cash on hand.
The following table sets forth information on our net cash flows from operating, investing, and financing activities for the periods stated: For the Year Ended December 31, (Dollars in thousands) 2024 2023 2022 Net cash provided by operating activities $ 28,922 $ 26,184 $ 6,456 Net cash (used in) provided by investing activities (3,209) (3,417) 11,257 Net cash used in financing activities (28,537) (26,677) (26,221) Operating Activities As discussed above, we are dependent on cash flows from operating activities to meet our cash requirements.
The following table sets forth information on our net cash flows from operating, investing, and financing activities for the periods stated: For the Year Ended December 31, (Dollars in thousands) 2025 2024 2023 Net cash provided by operating activities $ 28,949 $ 28,922 $ 26,184 Net cash used in investing activities (3,052) (3,209) (3,417) Net cash used in financing activities (29,790) (28,537) (26,677) Operating Activities As discussed above, we are dependent on cash flows from operating activities to meet our cash requirements.
We maintained a valuation allowance of $2.3 million related to federal foreign tax credits and certain state net operating losses as we do not believe current projections of future taxable income will be sufficient to utilize those tax assets and credits prior to expiration.
We had a valuation allowance of $1.9 million and $2.3 million as of December 31, 2025 and 2024, respectively, related to federal foreign tax credits and certain state net operating losses and state tax credits, as we do not believe current projections of future taxable income will be sufficient to utilize those tax assets and credits prior to expiration.
The following reflects the impact of subscribers and ARPU on the change in wireless revenue: Units in Service as of December 31, Revenue for the Year Ended December 31, Change Due To: (Units and Dollars in Thousands) 2024 2023 Change 2024 2023 Change ARPU Units Paging revenue 720 765 (45) $ 70,958 $ 73,135 $ (2,177) $ 2,306 $ (4,483) As demand for one-way and two-way messaging has declined, we have developed or added service offerings such as encrypted paging and Spok Mobile with a pager number in order to increase our revenue potential and mitigate the decline in our wireless revenue.
The following reflects the impact of subscribers and ARPU on the change in wireless revenue: Units in Service as of December 31, Revenue for the Year Ended December 31, Change Due To: (Units and Dollars in Thousands) 2025 2024 Change 2025 2024 Change ARPU Units Paging revenue 675 720 (45) $ 68,559 $ 70,958 $ (2,399) $ 1,914 $ (4,313) As demand for one-way and two-way messaging has declined, we have developed or added service offerings such as encrypted paging and Spok Mobile with a pager number in order to increase our revenue potential and mitigate the decline in our wireless revenue.
While we monitor daily the cash balances in our operating accounts and adjust the cash balances as appropriate, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets.
While we monitor daily the cash balances in our operating accounts and adjust the cash balances as appropriate, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, we have experienced no loss or lack of access to cash in our operating accounts.
We did not qualify for the research and development tax credits in 2024. We assess the recoverability of our deferred income tax assets, which represent the tax benefits of future tax deductions, based on available positive and negative evidence, and by considering the adequacy of future taxable income from all sources, including prudent and feasible tax planning strategies.
We assess the recoverability of our deferred income tax assets, which represent the tax benefits of future tax deductions, based on available positive and negative evidence and by considering the adequacy of future taxable income from all sources, including prudent and feasible tax planning strategies.
The fair value of the reporting unit is estimated under a market-based approach using the fair value of the Company's common stock. The estimated fair value requires significant judgments, including timing and appropriateness of the price of common stock used (e.g., point-in-time application, simple moving average, exponential moving average), as well as application of an estimated control premium, if necessary.
The estimated fair value requires significant judgments, including timing and appropriateness of the price of common stock used (e.g., point-in-time application, simple moving average, exponential moving average), as well as application of an estimated control premium, if necessary.
These expenses support our efforts to maintain gross placements of units in service, which mitigated the impact of disconnects on our wireless revenue base, and to identify business opportunities for additional or future software sales.
The sales and marketing staff are involved in selling our communication solutions primarily in the United States. These expenses support our efforts to maintain gross placements of units in service, which mitigated the impact of disconnects on our wireless revenue base, and to identify business opportunities for additional or future software sales.
Depreciation and Accretion For the year ended December 31, 2024, compared to 2023, depreciation and accretion expenses decreased by $0.3 million, primarily due to decreases in asset retirement cost and pager depreciation.
Depreciation and accretion: decreased by $0.7 million, or 17.3%, for the year ended December 31, 2025, compared to 2024, primarily due to decreases in accretion and pager depreciation, offset by increases in asset retirement cost.
We believe continued reductions in these expenses will occur for the foreseeable future as we continue to consolidate our networks, although the benefits of such network rationalization efforts and resulting costs savings will continue to decline. • Selling and Marketing. The sales and marketing staff are involved in selling our communication solutions primarily in the United States.
We believe continued reductions in these expenses will occur for the foreseeable future as we continue to consolidate 33 Table of Contents our networks, although the benefits of such network rationalization efforts and resulting costs savings will continue to decline. • Selling and Marketing.
The following table provides the Company's significant commitments and contractual obligations as of December 31, 2024: Payments Due by Period (Dollars in thousands) Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Operating lease obligations $ 10,548 $ 3,479 $ 4,285 $ 1,794 $ 990 Unconditional purchase obligations 4,896 2,189 2,632 75 — Total contractual obligations $ 15,444 $ 5,668 $ 6,917 $ 1,869 $ 990 We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
The following table provides the Company's significant commitments and contractual obligations as of December 31, 2025: Payments Due by Period (Dollars in thousands) Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Operating lease obligations $ 7,754 $ 2,676 $ 3,550 $ 948 $ 580 Unconditional purchase obligations 2,804 1,316 1,488 — — Total contractual obligations $ 10,558 $ 3,992 $ 5,038 $ 948 $ 580 We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
This repurchase authority allows us, at management’s discretion, to selectively repurchase shares of our common stock from time to time in the open market depending upon market price and other factors.
In February 2022, the Board of Directors authorized a share repurchase program of up to $10 million of the Company's common stock. This repurchase authority allows us, at management’s discretion, to selectively repurchase shares of our common stock from time to time in the open market depending upon market price and other factors.
Results of Operations The following table is a summary of our Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022, and the discussion that follows compares the year ended December 31, 2024 to the year ended December 31, 2023.
Our software is licensed to end users under an industry standard software license agreement. Results of Operations The following table is a summary of our Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023, and the discussion that follows compares the year ended December 31, 2025 to the year ended December 31, 2024.
The assessment and determination of performance obligations for a given contract requires significant judgment. Wireless service contracts are generally considered to be a single promise and therefore accounted for as a single performance obligation.
Revenue Recognition We review each contract to determine whether to account for the various promises as one or more performance obligations. The assessment and determination of performance obligations for a given contract requires significant judgment. Wireless service contracts are generally considered to be a single promise and. therefore, accounted for as a single performance obligation.
Critical Accounting Estimates The Company’s accounting policies are described more fully in Note 1 of the Consolidated Financial Statements. As disclosed in Note 1, the preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes.
As disclosed in Note 1, the preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ significantly from those estimates.
Severance and Restructuring For the years ended December 31, 2024 and 2023, severance and restructuring expenses were $1.1 million and $0.6 million, respectively, primarily due to expenses related to the early termination of the lease of our corporate headquarters in Alexandria, Virginia.
Severance and restructuring : decreased by $0.6 million, or 58.5%, for the year ended December 31, 2025, compared to 2024, primarily due to expenses related to the early termination of the lease of our corporate headquarters in Alexandria, Virginia in 2024.
To date, we have experienced no loss or lack of access to cash in our operating accounts. 36 Table of Contents We intend to use our cash on hand to provide working capital, to support operations, to invest in our business, and to return value to stockholders through cash dividends and repurchases of our common stock.
We intend to use our cash on hand to provide working capital, to support operations, to invest in our business, and to return value to stockholders through cash dividends and repurchases of our common stock.
We may also consider using cash to fund or complete opportunistic investments and acquisitions that we believe will provide a measure of growth or revenue stability while supporting our existing operations.
We may also consider using cash to fund or complete opportunistic investments and acquisitions that we believe will provide a measure of growth or revenue stability while supporting our existing operations. With our ongoing efforts to maximize revenue and optimize costs, we anticipate positive cash flow generation will continue in future operating periods.
We believe that the following discussion addresses the Company’s most critical accounting estimates, which are those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the Company’s financial condition and results of operations. 38 Table of Contents Revenue Recognition We review each contract to determine whether to account for the various promises as one or more performance obligations.
We believe that the following discussion addresses the Company’s most critical accounting estimates, which are those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the Company’s financial condition and results of operations.
This increase was partially offset by lower hardware costs resulting from lower hardware sales as compared to 2023. Research and Development Research and development expenses increased by $1.0 million, or 9.5%, for the year ended December 31, 2024, compared to 2023. This increase was driven by our continued effort to invest in the enhancement of our software solutions.
Research and development : increased by $0.5 million, or 4.5%, for the year ended December 31, 2025, compared to 2024. This increase was driven by our continued effort to invest in the enhancement of our software solutions. Technology operations : decreased by $1.0 million, or 4.0%, for the year ended December 31, 2025, compared to 2024.
We believe that demand for wireless services will continue to decline for the foreseeable future in line with recent trends, as our wireless products and services are replaced with other competing technologies, such as the shift from narrowband wireless service offerings to broadband technology services.
Product revenue includes one-time fees when customers cancel our services and is highly variable as the fees are charged to customers when pagers are disconnected and the customer is unable to return the units. 32 Table of Contents We believe that demand for wireless services will continue to decline for the foreseeable future in line with recent trends, as our wireless products and services are replaced with other competing technologies, such as the shift from narrowband wireless service offerings to broadband technology services.
The available cash and cash equivalents consist of cash in our operating accounts and cash invested in interest-bearing funds managed by third-party financial institutions. We maintain the majority of our cash and cash equivalents in accounts with major United States and multi-national financial institutions, and the majority of our deposits at these institutions exceed insured limits.
We maintain the majority of our cash and cash equivalents in accounts with major United States and multi-national financial institutions, and the majority of our deposits at these institutions exceed insured limits. Market conditions can impact the viability of these institutions.
The table below details total revenue for the periods stated: (Dollars in thousands) 2024 Change 2023 Change 2022 Wireless revenue: Paging revenue $ 70,958 $ (2,177) (3.0) % $ 73,135 $ (188) (0.3) % $ 73,323 Product and other revenue 2,565 (268) (9.5) % 2,833 534 23.2 % 2,299 Wireless revenue 73,523 (2,445) (3.2) % 75,968 346 0.5 % 75,622 Software revenue: License 7,648 (1,073) (12.3) % 8,721 1,519 21.1 % 7,202 Professional services - projects 14,616 1,311 9.9 % 13,305 1,721 14.9 % 11,584 Professional services - managed services 3,259 1,870 134.6 % 1,389 408 41.6 % 981 Hardware 1,382 (1,293) (48.3) % 2,675 464 21.0 % 2,211 Operations revenue 26,905 815 3.1 % 26,090 464 2.1 % 21,978 Maintenance 37,225 258 0.7 % 36,967 33 0.1 % 36,934 Software revenue 64,130 1,073 1.7 % 63,057 497 0.8 % 58,912 Total revenue $ 137,653 $ (1,372) (1.0) % $ 139,025 $ 843 0.6 % $ 134,534 Wireless Revenue Wireless revenue consists of two primary components: paging revenue and product and other revenue.
The table below details total revenue for the periods stated: 31 Table of Contents (Dollars in thousands) 2025 Change 2024 Change 2023 Wireless revenue: Paging revenue $ 68,559 $ (2,399) (3.4) % $ 70,958 $ (2,177) (3.0) % $ 73,135 Product and other revenue 3,963 1,398 54.5 % 2,565 (268) (9.5) % 2,833 Wireless revenue 72,522 (1,001) (1.4) % 73,523 (2,445) (3.2) % 75,968 Software revenue: License 7,347 (301) (3.9) % 7,648 (1,073) (12.3) % 8,721 Professional services - projects 15,496 880 6.0 % 14,616 1,311 9.9 % 13,305 Professional services - managed services 6,623 3,364 103.2 % 3,259 1,870 134.6 % 1,389 Hardware 1,287 (95) (6.9) % 1,382 (1,293) (48.3) % 2,675 Maintenance and subscription 36,433 (792) (2.1) % 37,225 258 0.7 % 36,967 Software revenue 67,186 3,056 4.8 % 64,130 1,073 1.7 % 63,057 Total revenue $ 139,708 $ 2,055 1.5 % $ 137,653 $ (1,372) (1.0) % $ 139,025 Wireless Revenue Wireless revenue consists of two primary components: paging revenue and product and other revenue.
Investing Activities For the years ended December 31, 2024 and 2023, net cash used in investing activities was $3.2 million and $3.4 million, respectively, primarily due to capital expenditures. 37 Table of Contents Financing Activities For the years ended December 31, 2024 and 2023, net cash used in financing activities was $28.5 million and $26.7 million, respectively, primarily due to cash distributions to stockholders of $26.4 million and $25.6 million, respectively.
For the years ended December 31, 2025 and 2024, net cash provided by operating activities remained steady at $28.9 million. 36 Table of Contents For the years ended December 31, 2025 and 2024, net cash used in investing activities was $3.1 million and $3.2 million, respectively, primarily due to capital expenditures.
System equipment and operating costs have not significantly increased in price, and the price of wireless messaging devices has tended to decline in recent years. Our general operating expenses, such as salaries, site rent for transmitter locations, employee benefits and occupancy costs, are subject to normal inflationary pressures.
System equipment and operating costs have not significantly increased in price, and the price of wireless messaging devices has tended to decline in recent years.
Interest Income and Provision for (Benefit from) Income Taxes Interest Income Interest income increased by $0.1 million for the year ended December 31, 2024, compared to 2023, primarily due to an increase in interest earned on the Company's cash balances, driven by higher interest rates from macroeconomic events. 35 Table of Contents Provision for (Benefit from) Income Taxes The effects of foreign taxes are immaterial for all periods presented.
Interest Income, Other Income (Expense) and Provision for Income Taxes Interest income: decreased by $0.3 million for the year ended December 31, 2025, compared to 2024, primarily due to a decrease in interest earned on the Company's cash balances, driven by lower interest rates from macroeconomic events.
Technology Operations Technology operations expenses decreased by $1.5 million, or 5.9%, for the year ended December 31, 2024, compared to 2023. The decrease was driven by reduction in the number of active transmitters, resulting from our network rationalization efforts.
The decrease was driven by a reduction in the number of active transmitters, resulting from our network rationalization efforts. The number of active transmitters, which directly affects our telecommunications and site rent expenses, declined 5.9% from December 31, 2024 to December 31, 2025.
Our investment in research and development in prior years qualified for the research and development income tax credit under Section 41 of the Internal Revenue Code. Unused research and development tax credits have a 20-year carryover and will provide future tax benefits once Spok’s net operating losses are fully utilized.
Unused research and development tax credits have a 20-year carry-over and will provide future tax benefits once Spok’s net operating losses are fully utilized.
The following provides the effective tax rate reconciliation for the years ended December 31, 2024, 2023 and 2022, respectively (See Note 9, "Income Taxes" in the Notes to Consolidated Financial Statements for further discussion on our income taxes): (Dollars in thousands) 2024 2023 2022 Income before income taxes $ 20,032 $ 22,325 $ 997 Income taxes computed at the federal statutory rate $ 4,207 21.0 % $ 4,688 21.0 % $ 209 21.0 % State income taxes, net of federal benefit 886 4.4 % 1,343 6.0 % 121 12.1 % Change in valuation allowance — — % — — % (21,850) (2,191.6) % Research and development and other tax credits — — % — — % (88) (8.8) % Excess executive compensation 609 3.0 % 405 1.8 % 231 23.1 % Other (635) (3.2) % 223 0.9 % 518 52.0 % Provision for (benefit from) income taxes $ 5,067 25.3 % $ 6,659 29.8 % $ (20,859) (2,092.2) % The provision for income taxes decreased by $1.6 million for the year ended December 31, 2024, compared to 2023, primarily due to a decrease in both federal and state income taxes stemming from lower income in 2024.
Other income (expense) : other income increased by $1.0 million, for the year ended December 31, 2025, compared to 2024, primarily due to the gain on sale of a domain name for $0.7 million and a gain on asset retirement obligation settlement for $0.1 million. 34 Table of Contents Provision for income taxes: The following provides the effective tax rate reconciliation for the years ended December 31, 2025, 2024 and 2023 (See Note 9, "Income Taxes" in the Notes to Consolidated Financial Statements for further discussion on our income taxes): (Dollars in thousands) 2025 2024 (b) 2023 (b) Income before income taxes $ 21,442 $ 20,032 $ 22,325 Income taxes computed at the federal statutory rate $ 4,503 21.0 % $ 4,207 21.0 % $ 4,688 21.0 % State and local income taxes, net of federal benefit (a) 1,134 5.3 % 886 4.4 % 1,343 6.0 % Foreign tax effects Other foreign jurisdictions 2 — % — — % — — % Research and development and other tax credits (180) (0.8) % — — % — — % Nontaxable or Nondeductible items Excess executive compensation 862 4.0 % 609 3.0 % 405 1.8 % Stock compensation (672) (3.1) % — — % — — % Other (47) (0.2) % — — % — — % Other adjustments (41) (0.2) % (635) (3.1) % 223 1.0 % Provision for income taxes $ 5,561 25.9 % $ 5,067 25.3 % $ 6,659 29.8 % (a) During the year ended December 31, 2025, state taxes in California, Illinois, Virginia, Pennsylvania, New Jersey and Massachusetts made up the majority (greater than 50 percent) of the tax effect in this category.
Revenue generated by the sale of our software solutions, which includes software license, professional services (installation, consulting and training), equipment procured by us from third parties (to be used in conjunction with our software) and post-contract support (ongoing maintenance), is presented as software revenue in our Consolidated Statements of Operations.
Revenue generated by the sale of our software solutions, which includes revenue from our perpetual and term software license arrangements, revenue from the sale of hardware that facilitates the use of our software solutions, professional services revenue related to the implementation of our solutions and value-added services, and maintenance and subscription revenue that is generated from the ongoing support of our perpetual and term software license arrangements, is presented as software revenue in our Consolidated Statements of Operations.
Revenue generated by the sale of our software solutions, which includes software license, professional services (installation, consulting and training), equipment procured by us from third parties (to be used in conjunction with our software) and post-contract support (ongoing maintenance), is presented as software revenue in our Consolidated Statements of Operations.
Revenue generated by the sale of our software solutions, which includes revenue from our perpetual and term software license arrangements, revenue from the sale of hardware that facilitates the use of our software solutions, professional services revenue related to the implementation of our solutions and value-added services, and maintenance and subscription revenue that is generated from the ongoing support of our perpetual and term software license arrangements, is presented as software revenue in our Consolidated Statements of Operations.
This resulted in a one-time benefit of approximately $0.9 million, as commissions expense was adjusted to account for the deferral of certain items that had been previously expensed. General and Administrative General and administrative expenses increased by $0.1 million, or 0.4%, for the year ended December 31, 2024, compared to 2023. Expenses were largely in line with 2023.
The second quarter of 2024 included a one-time benefit of approximately $0.9 million to adjust for commissions expense that was previously expensed as incurred under an ASC 606 practical expedient. General and administrative : increased by $0.6 million, or 2.0%, for the year ended December 31, 2025, compared to 2024.
Refer to Note 1, "Organization and Significant Accounting Policies" and Note 9, "Income Taxes" in the Notes to Consolidated Financial Statements for further discussion. Liquidity and Capital Resources Cash and Cash Equivalents At December 31, 2024, we held cash and cash equivalents of $29.1 million.
The change of $0.4 million resulted from a decrease in state tax credit carry-forwards as compared to 2024. Refer to Note 1, "Organization and Significant Accounting Policies" and Note 9, "Income Taxes" in the Notes to Consolidated Financial Statements for further discussion.
We generally perform this annual impairment test in the fourth quarter of the fiscal year. We evaluate goodwill for impairment between annual tests if indicators of impairment exist. Significant judgment is required in the determination of a triggering event given the qualitative nature of the assessment.
Goodwill is not amortized but is evaluated for impairment at least annually, or when events or circumstances suggest a potential impairment has occurred. We generally perform this annual impairment test in the fourth quarter of the fiscal year. We evaluate goodwill for impairment between annual tests if indicators of impairment exist.
These decreases were partially offset by an increase in ARPU as a result of price increases initiated in September 2024. ARPU was $7.97, as compared to $7.71 for the same period in 2023.
These decreases were partially offset by an increase in ARPU, from $7.97 for the year ended December 31, 2024 to $8.20 for the year ended December 31, 2025. The increase in ARPU was a result of price increases initiated in September 2025 and 2024, as well as general increases in pass-through fees, which effectively have corresponding costs associated with them.
Maintenance revenue is generated from the ongoing support of our software solutions or related hardware, typically contracted for a period of between one and three years. 32 Table of Contents To a large degree, software revenue corresponds to our backlog of performance obligations ready to deliver at some point in the future, and any delays in implementation may affect the timing of revenue recognition.
We will continue to explore ways to innovate and provide customers the highest value possible. Software Revenue Software revenue, to a large degree, corresponds to our backlog of performance obligations ready to deliver at some point in the future, and any delays in implementation may affect the timing of revenue recognition.
Further enhancements are expected to provide additional avenues for license sales, which generate new maintenance revenue and help to reduce levels of gross churn. 33 Table of Contents Operating Expenses Our operating expenses are presented in functional categories. Certain of our functional categories are especially important to overall expense control and management.
This increase was partially offset by decreases in license and maintenance and subscription revenue, driven by lower license sales. Operating Expenses Our operating expenses are presented in functional categories. Certain of our functional categories are especially important to overall expense control and management. These operating expenses are categorized as follows: • Cost of Revenue.
For the years ended December 31, 2024 and 2023, net cash provided by operating activities was $28.9 million, and $26.2 million, respectively, primarily due to an increase in cash received from customers, partially offset by cash payments for cost of revenues and operating expenses.
Financing Activities For the years ended December 31, 2025 and 2024, net cash used in financing activities was $29.8 million and $28.5 million, respectively, primarily due to cash distributions to stockholders of $27.3 million and $26.4 million and the purchase of common stock for tax withholding on vested equity awards of $2.8 million and $2.4 million , respectively.
Impairment of Goodwill and Long-Lived Assets We are required to evaluate the carrying value of our goodwill, long-lived assets and intangible assets subject to amortization. Goodwill is not amortized but is evaluated for impairment at least annually, or when events or circumstances suggest a potential impairment has occurred.
The change of $0.4 million resulted from a decrease in state tax credit carry-forwards as compared to 2024. Impairment of Goodwill and Long-Lived Assets We are required to evaluate the carrying value of our goodwill, long-lived assets and intangible assets subject to amortization.
Selling and Marketing Selling and marketing expenses decreased by $0.5 million, or 3.1%, for the year ended December 31, 2024, compared to 2023,. The decrease in commissions is primarily due to the amortization of certain commissions expenses, which were previously expensed as incurred under an ASC 606 practical expedient.
Selling and marketing : increased by $1.5 million, or 9.1%, for the year ended December 31, 2025, compared to 2024. This increase was primarily driven by higher commissions and personnel costs.
Removed
Our software is licensed to end users under an industry standard software license agreement. Strategic Business Plan In February 2022, our Board of Directors announced a new strategic business plan that included a restructuring of our business to discontinue Spok Go and eliminate all associated costs and optimize the Company’s existing structure to drive continued cost improvement.
Added
Management concluded that presenting certain information technology ("IT") expenses within their respective functional expense categories provides a more meaningful and representative depiction of the nature of these costs. Accordingly, we reclassified these IT-related 30 Table of Contents expenses from general and administrative to the applicable functional categories for all periods presented.
Removed
Since then, the strategic business plan includes a focus on our existing and established business, including the Spok Care Connect Suite and our wireless service offerings. The restructuring efforts were completed during the fourth quarter of 2022.
Added
These reclassifications had no effect on the reported results of operations or the statement of financial position.
Removed
These actions allowed us to better align costs and, as a result, continue to return capital to stockholders in the form of quarterly dividends of $0.3125 per share in 2024. We will continue to focus on optimizing costs to allow us to prioritize cash flow generation and the return of capital to stockholders.
Added
To conform with the current year presentation, we reclassified previously reported operating expenses for the years ended December 31, 2024 and 2023 as follows: For the Year Ended December 31, 2024 (Dollars in thousands) As Previously Reported Adjustment As Reclassified Cost of revenue $ 28,430 $ 277 $ 28,707 Research and development 11,548 146 11,694 Technology operations 24,306 1,329 25,635 Selling and marketing 15,851 369 16,220 General and administrative 33,301 (2,121) 31,180 Total operating expenses $ 113,436 $ — $ 113,436 For the Year Ended December 31, 2023 (Dollars in thousands) As Previously Reported Adjustment As Reclassified Cost of revenue $ 26,818 $ 276 $ 27,094 Research and development 10,549 135 10,684 Technology operations 25,843 1,302 27,145 Selling and marketing 16,350 396 16,746 General and administrative 33,168 (2,109) 31,059 Total operating expenses $ 112,728 $ — $ 112,728 Revenue We offer a focused suite of unified clinical communications and collaboration solutions that include call center applications, clinical alerting and notifications, one-way and advanced two-way wireless messaging services, mobile communications and public safety solutions.
Removed
We will continue to explore ways to innovate and provide customers the highest value possible. In late 2021, we began offering our newest pager, GenA. This one-way alphanumeric pager features a high resolution ePaper display, intuitive modern user interface, advanced encryption and security features, over-the-air remote programming, and an antimicrobial housing.
Added
The decrease in paging revenue was partially offset by an increase in product revenue, driven by the pricing increase on one-time fees assessed for pagers not returned at contract termination, implemented in early 2025.
Removed
Users can select from various font sizes, and the large GenA display also leverages proportional fonts to maximize key information on a single screen. The GenA pager is the only product available on the market with these capabilities, and we maintain an exclusive arrangement with the product's manufacturer.
Added
This increase was primarily driven by technology costs, legal costs unrelated to core business activities and non-recurring in nature, and bad debt, partially offset by lower compensation costs.
Removed
Given the product differentiation of the GenA pager, its development is a key initiative in providing a competitive advantage, and we expect this new technology will be popular with our customers in clinical environments and may help slow our wireless revenue attrition. Software Revenue Software revenue consists of two components: operations revenue and maintenance revenue.
Added
(b) The Company adopted ASU 2023‑09 prospectively in 2025. Prior periods have not been restated and therefore do not reflect the disaggregation requirements introduced by the standard.
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Operations revenue consists primarily of license and subscription revenues for our healthcare communications solutions, revenue from the sale of hardware that facilitates the use of our software solutions, and professional services revenue related to the implementation of our solutions.
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The provision for income taxes increased by $0.5 million for the year ended December 31, 2025, compared to 2024, due to an increase in federal and state income taxes, stemming from higher income in 2025. Our investment in research and development in prior years qualified for the research and development income tax credit under Section 41 of the IRC.
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This increase was partially offset by decreases in license and hardware revenue, driven by lower sales. Maintenance Revenue We have seen modest improvement in our gross maintenance revenue churn alongside increasing operational bookings, which drive new maintenance revenue.
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Liquidity and Capital Resources Cash and Cash Equivalents At December 31, 2025, we held cash and cash equivalents of $25.3 million. The available cash and cash equivalents consist of cash in our operating accounts and cash invested in interest-bearing funds managed by third-party financial institutions.
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Given these dynamics, we believe annual maintenance revenue is likely to remain flat or increase marginally, as we continue to enhance our existing software solutions.
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For the year ended December 31, 2025, the net cash also includes proceeds from the sale of a domain name.
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The number of active transmitters, which directly affects our telecommunications and site rent expenses, declined 5.2% from December 31, 2023 to December 31, 2024. As we reach certain minimum frequency commitments, as outlined by the FCC, we may be unable to continue our efforts to rationalize and consolidate our networks.
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Our general operating expenses, such as salaries, site rent for transmitter locations, employee benefits and occupancy costs, are subject to normal inflationary pressures. 37 Table of Contents Critical Accounting Estimates The Company’s accounting policies are described more fully in Note 1 of the Consolidated Financial Statements.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk At December 31, 2024, we had no outstanding borrowings or associated debt service requirements. Foreign Currency Exchange Rate Risk We conduct a limited amount of business outside the United States.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk At December 31, 2025, we had no outstanding borrowings or associated debt service requirements. Foreign Currency Exchange Rate Risk We conduct a limited amount of business outside the United States.
The financial impact of transactions billed in foreign currencies is immaterial to our financial results and, consequently, we do not have any material exposure to the risk of foreign currency exchange rate fluctuations. 40 Table of Contents
The financial impact of transactions billed in foreign currencies is immaterial to our financial results and, consequently, we do not have any material exposure to the risk of foreign currency exchange rate fluctuations. 39 Table of Contents

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