Vince Kelly | President and CEO |
Mike Wallace | CFO |
Hemant Goel | President, Operating Company |
Good morning, and welcome to Spok's Third Quarter Investor Call. Today's call is being recorded. On line today, we have Vince Kelly, President and Chief Executive Officer; Mike Wallace, Chief Financial Officer; and Hemant Goel, President of Spok's Operating Company. At this time, for opening comments, I will turn the call over to Mr. Wallace. sir. ahead, go Please
good quarter you XXXX and for joining our third investor morning. you, for Thank us Thank update.
conditions. as statements are call Before These dependent I only we assurance are to plans, forward-looking to and results. or results differ statements include Spok's future company's of conference future performance. and uncertainties or revenue, expenses may want Spok's give actual results, subject represent well upon estimates forward-looking these could may statements Such statements. events to remind future materially on this income which the conference risks discuss not everyone any other date that those related our and statements the from that to in are operating include actual call predictive business of as to financial and intended today's as estimates anticipated
on be Please subject the and statements that company in in are these the the business Risk to XX-K. review risks based to to Factors Form compete section environment believes our Although our contained we relating are operations assumptions and they which reasonable, XXXX uncertainties.
the filings file Our conference note no with which XX-Q, quarter expect today; over and that, update any Commission. Vince. call we to turn filed to past obligation third related present and calls. that from documents the to or Exchange Form and assumes Securities later Please Spok statements I'll forward-looking With
for Spok. quarter speak a performance believe results we you Thanks, and was good Mike, today regarding pleased and operating our third We're with morning. to solid what
to upgrade sales team tools integrated and we management. growth communications Spok will Connect our We believe infrastructure investments these significant overall with as are well platform, are our seeing enhance that from respect our benefits and and future benefits and yield investments our potential. We Care as making development product the to
and metrics, During cash including in the operating key number a flow revenue expense performance quarter, management. strong growth, of we saw
in We solutions, delivering long-term towards Spok communications total our X% with transitioning the as a also progress in in quarter revenue quarter, prior to represents Spok the model third revenue. noteworthy while This than growth quarter, revenue third our outpaced decline of made clinical growth increase year. less-than-anticipated more from revenue cash allowed by execute leading our our total Also consecutive the this further industry software a capital growth us strategy second against the the balances. cash quarter, allocation for flow generation adding to to wireless in
than from prior result revenue The Maintenance third million more revenue that up quarter XX% software stable the stream on revenue is base. rate revenue increase than a $X.X more of from of revenue quarter the from a Spok's the revenue was company as prior in a maintenance revenue operations slightly X% to than contracts. XX% stream, Similar the was maintenance provides more wireless up and year. revenue recurring a with a prior XX% quarter renewal and more
key streams This continue This base on investments while us and enhance stockholder ability operate value allocation on recurring provides product the nature. nearly to our make profitably our offerings. revenue business we strong of Overall, long-term with revenue to capital XX% quarter, strategy. enhance our to were our in executing
key on Mike results that, we performance before But operating provide the the period about as momentum a We the few details confident quarter. are into remain will team want our to head and excited that briefly and Hemant for financial third the in quarter. our and highlight generated I fourth shortly.
of year operations $X.X bookings, software levels million of $X $XX.X First; million year the period. from in in were and included line bookings with earlier prior up million
as of bookings represents their to adding solutions. our on was products both portfolio current year-over-year and sequential to We're the applications customers new sales up an basis XX at September expand included and encouraged both and communications software existing of backlog Additionally, customers historical $XX.X and million with high.
We smartphone demand continue solutions and to see growing secure messaging critical for alerting. clinical center, our for software contact to
of these Spok integrated part of Care our communications are Connect All platform.
trends revenue subscriber continue wireless to stabilize. Second,
for Our improved annual rate XX of to paging X.X%. unit points the erosion quarter basis
a stable XX-month than over anticipated X% of basis from revenue unit only past revenue down several is As quarters, per a the result last levels erosion lower year. average trailing wireless or relatively and ARPU unit, on
is of of of that midpoint beginning As the this, range a trending year. above result at the guidance revenue our of all we the XXXX provided the
both Next; basis. operating and on costs, essentially development expenses, excluding were flat amortization, and sequential research annual and an accretion depreciation,
expenses I'll to to capital me later form strategy in before But Mike stockholders other the in further to contributing capital a very Our and ability ability of mission increase our how research CFO, our review our our this approximately These on while million regular development the year. over prioritize daily at to platform. long-term increases Mike financial Spok free our past sales Spok's team provide cash investments support talk the Wallace, and effort the guidance briefly we expenses product basis. the helped end put bit and the dividend range finally, the couple to making minutes. during call. partially expense Spok our developments few quarter, in has detail align highlights, This in expenses. vision made let R&D share low return us and on a the a $X are turn will in our comment from And a our lives we to over in our to adding in of support allocation the cash generated I the balances. about flow quarter quarterly call our third of XXXX operating will of offset to
the assisting disrupting spoofed an the First, Using the late our of industry the Commission the were campaigns I'm in telemarketing proud information that during FCC's FCC These subpoena source the to our fine recently Enforcement to provided XX,XXX time was give falsified [ph] to of In able Bureau $XX Federal that verified you for to used Based made information. complained investigators Spok health perpetuators. than on the million was calls an that FCC co-op call Communications more the caller that these basis levied network. became identify Spok's robocalling in ID records. calls, company against leadership investigation robocalls. records, in an XXXX, example by insurance
I'm role doing swimming calls our both report these While the sometimes teams against tide our to part be we're that leadership a situation. of technical improve to proud on are and appears that in it feels the as frequency annoying increase, proactive the legal to taking the
devastation to year this the in the emergency moment the recent institutions a Spok's hurricanes you and about service resulting talk from take to like affected I'd Next, and role in healthcare to responders regions. supporting
anyone by these to out go prayers and storms. thoughts impacted Our
our While the well. resulting up of they simulcast the nature of Due flooding, and high rain our destruction a class path extremely from I'm our to network left powered zones held satellite these proud to coverage events. network, the Spok's best control, of and our and we transmitters customers engineering service virtually provided during XXX% in team functional. that we were catastrophic and
and recent moment Again, go Finally, in to I'd the prayers their to a victims families. thoughts Las our violence remember tragedy and off to and like Vegas. all the take brief
the to again, teams we're by the glad aftermath the to Financial customers solve were And our to supporting of able I'll our spike Officer. while violence. well in Chief events, our time call While Mike that, over turn systems Again, we with performed able their volumes, to Spok and need. of were the family entire these volume handle our is healthcare both hospitality support saddened increased in that, the customers Wallace, and our
Vince. Thanks,
for third more and as review information we contains highlights file conference review quarter, about encourage business, always, quarter would call. performance the today, to since later I XX-Q, which our our far financial our you this on third I will than to cover it we operations financial Before Form expect
our with As are quarter team Vince noted, the momentum is we in for year. as third performance confident finish and we the overall our operating were that the building pleased
the improvement to from operating saw continue quarterly solid business cash substantial contribution focused and of metrics. made for long-term software growth. invest toward goals, a we operating and expense progress number key increase margins, business flow, long-term addition in EBITDA our combined we both with wireless, helped our to year-over-year Revenue in management, meeting as we our and a sequential operating In
already In the contained We end. strong at continue and performance filings. today, interest news an on line balance our in and of federal sheet operate information also maintained free is will of that quarter company to not a by release, time basis, I third as much debt quarter a since schedules line our review
that include items, guidance I These balance the to of idea to quarter, Instead, prior generation, drivers morning questions results, those If and will quarter. quarterly performance. our our of a I this remainder revenue $XX.X With XXXX. give you for X% the portion revenue million, address was respect glad have about like be key of total expense Q&A quarter up I to third management, for finally, on four areas would the specific the focus during this call. of than any more revenue would from financial the better feel third our sheet financial
and quarter Vince total As revenue X%. of growth our our of second second this sequential it consecutive approximately was sequential growth, quarter out, pointed exceeded
down revenue. software wireless favorably continues maintenance primarily the Third from revenue, and impacted the solid churn team retention quarter outlined Wireless the revenue minimizing in less included companies $XX.X favorably compares subscription software end reflects attrition that again revenue maintaining while than and of the by in sales beginning erosion revenue, the strong that to professional by down Year-to-date, stable driven services X% continued unit revenue a the significant of to X% license at rates quarter, wireless was another and lower gross revenue include range to and million at paging Wireless strong was anticipated expectations guidance wireless which or performance that solid our $XXX,XXX our totaled guidance. the rate our revenue unit revenue we operations quarter. of exceed and anticipated pricing. year. range additions was from performance entire XXXX and in generate only renewal This low
was of million quarter. XX% the of the $XX.X saw exceeded more performance Again, sequential up in we increase in revenue revenue this second than quarter. software the $XX.X quarter million prior from Third X%
increases from and of from our from rates quarter, As revenue, in nearly million is from slightly our calls, revenue the installed the excess million generally software in The in second maintenance was increased the operations in to $X.X than up in X% Maintenance revenue, and year $X.X XX% period. quarter I've continuing software basis renewal reflect $X base. up XX% revenue solution more nearly other totaled ratable prior quarter million quarter. million third component solid prior the the the software on on our a and previous of now noted $X.X prior recognized
base We exclude expenses. has continues increase operating as reported expense continue the direct compares operating as result accretion, of $XX.X of period. year the of period. costs, million category. expenses efficiencies in in processes $XX.X that ago This of consolidated to to time sales The which quarter. well initiatives revenue; due Connect operating business, the of management cost amortization come to we Turning human expense yield the investments flat million primarily our areas in to Net but, year our and planned $XX.X primarily of across in expenses, the at the third the million, to certain and as The operations planned maintenance the platform and over This importantly cost depreciation, of upgrade is to business marketing. service, capital. in in expense rental our those platform, is our performance frame investment Spok and and not development totaled leverage our operating including research Care ago operating
Turning to headcount.
levels as adjust Connect We support our our Care continue investments anticipated necessary demand to to in as additions meet make the employee the levels to well platform.
employees, or and September XXXX, XXX at FTEs at XX, XX, December September equivalent XXX FTEs FTEs time XXX XXXX, XXXX. XX, were full at Our versus
out of represent by year, While platform. business our these R&D staff total offset show they the software and Eden over leveraging for the the Prairie largely company. other past been our Care facility the in Connect within of incremental increases have build Those a FTEs areas flat number
period. the $XX XX, the year the year-to-date XXXX, equipment. operating to September sheet the net generated $XX.X million million $X was at from other beginning payments nearly financial reduction Included of from balance nine-month and of by the year items. in and nearly million the the and and repurchases of million cash increase cash down balances totaled dividend $X use in by activities Turning over Cash the XX from spent This purchase offset approximately to fund property a to was million balance $XX June prior share and end. $XXX.X million
We expect the cash on dividends our outstanding to comment free in and debt Vince company. of our going We capital our with as continue with continue shortly. a portion connection debt to strategy a no will to exited quarterly quarter use forward. operate further allocation
deferred allow assets, our minimum DTAs, regular XX, had us of to all we or $XX to million although at tax virtually income, amount These DTAs allowance. in DTAs and our valuation XXXX, minimum of federal September at Looking federal nearly pay a we no are required taxable alternative tax. shelter
future. significant of credit Also net these tax re-impact losses reducing income availability the million DTAs, federal do in we that resulted our in XXXX. years to for pay the third operating the in expect XXXX for Our expire through credit of rate amount the analysis, DTAs primarily completed cumulative and taxes our which will Based year-to-date during X.X% consist effective tax income had to and foreseeable not a we XX.X%. of the development the a effective quarter to research tax $X.X quarter, and rate on of
forward, credit on tax of based this Going future. to investment research in benefit the levels development from respective and continue will we our
result with we the quarter, in XXXX guidance of the at saw range to maintaining respect third of year. are guidance for solid provided the beginning we a performance our Finally, financial as XXXX, we that the the
turn total $XXX million range. range $XX ranges look year-to-date that our to always capital expenses, based to $X and expectations again presenting depreciation, to would remind Hemant? those our to forward $XXX fourth accretion, trends to include you the update at million; operating the million revenue subject of that, on are sales trends With to to results. of who will for you expenditures or XXXX the from end will $XXX Hemant amortization excluding Those are I projections believe on million; XXXX midpoint release quarter the come current of of activities. quarter the third $XXX will and and our our based low expense we We Goel, once we range million. our marketing revenue call However, above in over on we that and that million performance, change. when and I
Thank and morning. you, Mike, good
This the year levels. was third outlined, our quarter in bookings and software with marketing previously totaling As $XX.X sales million. line team delivered prior in performance
is Market the of we the our our Our the momentum most continues, value our recognition have with communications platform and quarterly resonating healthcare of for on customers. and is we prospects, and stories the believe demonstrated by our enterprise with activity we strategy increasing, notably, by see volume conversations level bookings. behind customers website, of
streamlined patient new and and overall single coordination has provide helping business communication part in third XX Connect systems other comprising primarily the is schedules vision During and growth a solution we for quarter, to US proven using getting remains to Spok platform. XX% other staff that nearly providers integrated quarter of Canada. call worked is with in customer our in of the customers have with welcomed one and to highlight selected that systems health minutes with This couple sector. and This manual the quarter. hospitals care in a a scheduling a Spok improving real-time and metrics performance subservice is center healthcare Southern of us family, call access service. efficient the and with Their to new on the customers a key transfers, chosen a the system never of regional call before. the solution came like its quarter also our how value primary because replace Nearly information Spok processes quick customer and interoperability I'd Healthcare of more focus, an single to substantially disconnected health nearly at bookings and hospitals healthcare Spok multiple in reputation applications platform. our new customer this of Care delivering area. contact health take from has for Among our agents
and more Spok million which allows their community team hospital Each Spok with to a we during of examples mid-size, group database. it and fail patients. in-house today. response during the is activating embeds staff health offer, are they about these to environment storm units again with investments that throughout bound specific pagers by Hurricane EHR platform impact it means enterprise pleased mass used Spok used These The accepted units and them an communications still physicians seen making placing note, a We without from them knowing global like to emergency devastation. to a also They storm. contacted the times, a on-call call consult. critical in heading supports be the next demonstrate both the the final was and easier electronic they and One had totals working time their streamlining to employees coast X.X technology the quieter X,XXX we a the a when also events. actions, to rapid of and or in also our at I'd and group, provided Florida Spok's example in no regional that worked screen acquiring staff. are immediately communications care with staff Seeing all reliable that the all I'm during hospital, that colleagues business, Spok. failing the large activation with year Connect the This hospital earlier together should system a noncustomers makes in cold based Care all record, towards health which are the to seconds. The a better our workflows, actively and coordination that Irma team complements the critical their On few Spok's built healthcare patients highlight was whether emergency weeks. completed and provisioned a had rallying on call minutes of serving for and staff, Spok overnight case which Our caught responsiveness system. or quickly the the supply codes. their of strategic reduction improved with for for hospital the charge, Vince this paging customers were the were system response capture been reaching supported in leadership possible. units, in-house notification for unified notify we and engaged the all path their be sharp in issue of means and team for key these value scheduling are units level for for XXX so our its make hospital, their into call to than offered our over to into now use and the X,XXX have approximately concern number Mid-Atlantic ordering hospitals their report the as all customers improve facilities look hurricanes to numbers and hospital us has the customers reliability Southeast. for recent with mentioned hospital hurricanes. Florida-based
well has company concern power could. that were or records a communications Our paging need credibility contact the both tracked to Spok's aid throughout them to provided information evacuate gather teams storms, the Throughout our disaster we down customers offer support our The to to of on records scheduling as information. as in event have customers they to outages. of help and with hospital paper leader continue responsiveness the to shut ensured a continued won teams in The us critical as and should as lend had capabilities willing and in times in the increased teams need. situations that instructions storms. how the where in
during our the are and response of levels proud and these of our noncustomers gave support We we tragedies. customers
marketing to help Before activities. a turning website of us the sales would want efforts overall engines. by over mobile than activities rankings stronger Vince, drive and providing has to percentage leads I our in the period, update fill Ongoing largely things effective. on over investment over be year, highly These has The in traffic these and and pipeline. doubled driven search areas past than our to use that quadrupled are brief more back more provide
the Orleans, XXX to than new a recent Connect conference providing communication leads our presence event shows the sharp conference, engagement from from our and the trade more year. of continues hospital C-Suite to than number planning healthcare for our Connect Additionally, show and is Annual highlight professionals. the Spok Cycle IT speaking at experts from patient XXX management large and welcomed reputation in panels responsible in explore audience Spok's hospitals in on Review annual participants, like using place Revenue and New I'd setting outcomes. increase to took Third leaders Conference executives improve We year. Becker's social to significant continued for X,XXX our Marketing also last to than reach also week, generated opportunities Last In more clinicians, with for we healthcare growth. and participated September, Hospital and Chicago. conference. Spok technology Health late XX, throughout IT a enhance senior to With participated more challenges The a coordinating of C-suite.
the and Our to pave some future Connect the the communications in envision there. minds healthcare industry big, together the brightest get of conference brought of think to way
Connect. valuable opportunities as creating to the our Care showcase with our and brand essential integrated attend these to benefits reputation conferences trade industry grow assist the our technology leader. conferences Spok These collaboration for be shows of top in an Our continue and leading and us an hospitals industry through to platform, we is platform furthering us
expect health Looking in integrated for communications, market continued our especially forward, we demand care.
strategy to revenue and and to to PSG, base customers' our performance business, research is ongoing unified by point addressing Spok's provides solution to continued support a Professional accelerating needs the our or in solid on a implementation times. shift development contribute investment Our the Services and industry focus platform from away
and short, our continue communication for this continue that With We scalability Spok ROIs the right increases In fulfills needs, it pass strategy customers to to an Vince. efficiencies I'll their provide. platform and back and that, enterprise position for wide reinforce business growth. to is to
Hemant. you, Thank
the briefly like for Before a of to questions, open your up comment on I'd call we couple items.
value want could multifaceted current I to broaden strategy business stockholder strategy, acquisitions investments and our that want you allocation update streams With long-term capital I First, strategic through of our provide sustainable to solutions. capital also infrastructure review operating and allocation our to stockholders, capital to key business for platform and additional to on allocation our cash our respect achieve while portfolio our goals to our our outlook strategy revenue and that includes XXXX. potential overall maximizing returning goal is key improve growth and
of of continue a has quarterly XXXX, including We three foreseeable the million dividend December Spok quarters our future. $XX stockholders, was and expect approximately per to the to paying of January that Through in XXXX of paid in special XXXX. returned share, annually, $X.XXX first dividend our declared for $X.XX
investments strategy, of solution can strategy Next, allocation for product we growth development part software our attractive as model our returns where stockholders in pivot we generate and we continuing sales. a to capital we're believe our as in
possibility an of yet liquidity needs. for ample we've we outlined, not to to acquisition, variety previously to working the of capital reasons. while our we Last, have usual, as a maintain we remain support continue executed open As
portfolio. be to is review to a demonstrates weigh good our term. Spok for against we meantime, fit could and for in continue in synergistic internal increases candidates any in and the the and R&D approach continue to remain the that value disciplined will ensure both In short expenditures strategic that acquisition opportunities. our accretive our We we However, M&A solution platform
the and accelerating and number and and In simple with for markets, we key outlook, number a our Spok's committed industry-leading Wrapping opportunity Finally, focus business aligning values to an needed; increasing most to solutions have positions are remain believe goals that one, to services; number goals straightforward: We our regard where of Spok core performance reputation. number our first, up. the products providing fourth growth the build quarter customer chosen of our large four, development our long-term that continues year-to-date potential. values generated the putting order for We and the XXXX. us stronger believe point, ask advantage our beliefs. in momentum operator I'll we At innovation and the future those three, take your our to of and accountability. up Instructions] business open resources [Operator infrastructure; results two, this and past questions. to and reflect well call and plans matter, building
Instructions] [Operator
you. Tuesday doesn't any I night an it out Look, we Okay. this our look talked that night instead release quarter there's of had earnings like a unusual of results to Wednesday bit questions. And know put we and night, the before we
questions we that fairly were questions. did So yesterday some generic answer
a first me questions any earnings look we release and look, forward have fourth again a great get fourth Mike quarter. year. appreciate quarter quarter great with day a I speaking you today. want participation Hemant to And Everyone, our everybody's you or to with or appreciate next I follow-up. the of after we So to in
finish all Thank you. strong. Let's
today's participation. for Thank concludes your This call. you
You now disconnect may