EX-99.1 2 a3q218kex991.htm EX-99.1 Document
Exhibit 99.1
NEWS RELEASE
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CONTACT:
Lisa Fortuna or Mike Cummings            
312-445-2866        
spok@alpha-ir.com    

Spok Reports 2021 Third Quarter Results
Company affirms its financial outlook for full year 2021

Alexandria, Va. (November 3, 2021) - Spok Holdings, Inc. (NASDAQ: SPOK), a global leader in healthcare communications, today announced results for the third quarter ended September 30, 2021. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.125 per share, payable on December 10, 2021, to stockholders of record on November 16, 2021.

Third Quarter 2021 Highlights:
•Received record-level software maintenance renewal bookings of $12.1 million
•Continued improvement in year-over-year pager unit erosion on a trailing twelve-month basis
•Added further development enhancements to the Spok Go® platform
•Introduced the ReadyCall® Text pager
•For nine consecutive years, has partnered with all of the adult Best Hospitals, and in eight of the past nine years, provided solutions to all of the children’s Best Hospitals named to U.S. News & World Report’s 2021-22 Best Hospitals Honor Roll
•Completed Eleventh Annual State of Healthcare Communications Survey
•Subsequent to the end of the third quarter 2021, hosted annual Connect 21 Conference for customers in a virtual format

Management Commentary:
“We welcomed four new customers to the Spok family during the quarter of which three were software and one was wireless," said Vincent D. Kelly, president and chief executive officer. “Additionally, we successfully closed 12 six-figure deals from our pipeline. Software bookings were driven by strength in maintenance renewals, supporting our strong recurring revenue base. We added an additional
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Spok Go win during the quarter and remain encouraged by the size and quality of our pipeline, with the signing of three more Spok Go deals so far in the fourth quarter. We had continued improvement in year-over-year pager unit erosion on a trailing twelve-month basis, and software revenue was up in the third quarter of 2021 compared to the second quarter of 2021.

“During the third quarter 2021, we made several key product announcements, such as the newest version of Spok Go and the ReadyCall® Text pager to improve the patient experience. We also received recognition as a solutions provider to all 20 adult hospitals named to U.S. News & World Report’s 2021-22 Best Hospitals Honor Roll and conducted our eleventh annual survey on the state of healthcare communications to more thoroughly understand the unique challenges facing clinicians, particularly in the current environment. Finally, subsequent to the end of the third quarter 2021, the Company held its annual Connect 21 Conference for customers on October 11-12, 2021, in a virtual format, which was well received by both current and prospective customers. Tim Tindle, Spok’s Chief Information Officer, led a session on implementing a secure HIPAA-compliant messaging solution, using our new GenA™ pager, resulting in several new leads and orders. The success of the conference should create additional opportunities for 2022 and beyond," concluded Kelly.


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2021 Third Quarter and Year-to-Date Results:
Consolidated revenue for the third quarter of 2021 under Generally Accepted Accounting Principles (“GAAP”) was $35.9 million, compared to $37.7 million in the third quarter of 2020. For the first nine months of 2021, consolidated revenue totaled $107.6 million, compared to $110.7 million in the prior year period.
For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Dollars in thousands)20212020Change (%)20212020Change (%)
Wireless revenue
Paging revenue$18,844 $19,961 (5.6)%$57,332 $60,403 (5.1)%
Product and other revenue800 867 (7.7)%2,291 2,890 (20.7)%
Total wireless revenue$19,644 $20,828 (5.7)%$59,623 $63,293 (5.8)%
Software revenue
License$1,674 $1,988 (15.8)%$3,999 $3,692 8.3 %
Services$4,159 $4,772 (12.8)%$13,378 $13,132 1.9 %
Equipment$596 $554 7.6 %$1,694 $1,880 (9.9)%
Subscription$133 $24 454.2 %$268 $24 1,016.7 %
Maintenance9,645 9,527 1.2 %28,648 28,678 (0.1)%
Total software revenue16,207 16,865 (3.9)%47,987 47,406 1.2 %
Total revenue$35,851 $37,693 (4.9)%$107,610 $110,699 (2.8)%

Operating expenses in the third quarter of 2021 totaled $39.4 million and included approximately $0.9 million of costs related to the Company's previously announced strategic alternatives review process and $2.0 million in additional payroll and related costs as the Company-wide plan that reduced work schedules was terminated at the end of the second quarter of 2021. Adjusted operating expenses (which excludes depreciation, amortization and accretion charges, and includes capitalized software development costs) totaled $39.5 million in the third quarter of 2021, driven by the items noted above.

GAAP net loss for the third quarter of 2021 was $2.5 million, or a loss of $0.13 per diluted share, compared to net income of $3.2 million, or $0.16 per diluted share, in the third quarter of 2020. GAAP net loss for the first nine months of 2021 was $5.5 million, or a loss of $0.28 per diluted share, compared to net income of $2.4 million, or $0.12 per diluted share, in the prior year period.

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In the third quarter of 2021, adjusted EBITDA loss totaled $1.6 million compared to adjusted EBITDA of $3.8 million in the third quarter of 2020. In the first nine months of 2021, adjusted EBITDA loss totaled $1.4 million, compared to adjusted EBITDA of $4.3 million in the prior year period.
For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Dollars in thousands)20212020
Change (%)
20212020
Change (%)
Net (loss) income$(2,494)$3,165 178.8 %$(5,510)$2,384 331.1 %
Basic net (loss) income per common share$(0.13)$0.17 176.5 %$(0.28)$0.13 315.4 %
Diluted net income (loss) per share$(0.13)$0.16 181.3 %$(0.28)$0.12 333.3 %
Adjusted EBITDA$(1,594)$3,777 142.2 %$(1,357)$4,291 131.6 %


Financial Outlook:
The Company is affirming the financial outlook previously provided for full year 2021 as follows:
(Unaudited and in millions)Current Guidance
Full Year 2021
Revenue
Wireless$77.0 to$81.0 
Software$61.0 $70.0 
Total Revenue$138.0 $151.0 
Adjusted Operating Expenses$151.0 $157.0 
Capital Expenditures$3.5 $5.5 

"We are on track to achieve our financial targets for 2021, supported by our performance in the first nine months of the year," said Michael W. Wallace, chief operating officer and chief financial officer. “Spok's balance sheet remains strong, with a cash, cash equivalents and short-term investments balance of $67.5 million on September 30, 2021, and no debt.”



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2021 Third Quarter Call:
Due to the Company’s strategic alternatives review process, which was announced on September 3, 2021, Spok will not be hosting a conference call to discuss the third quarter 2021 results. The Company will keep all stakeholders apprised of the status of the process as and when it is appropriate.
* * * * * * * * *
About Spok
Spok, Inc., a wholly owned subsidiary of Spok Holdings, Inc. (NASDAQ: SPOK), headquartered in Alexandria, Virginia, is proud to be a global leader in healthcare communications. We deliver clinical information to care teams when and where it matters most to improve patient outcomes. Top hospitals rely on the Spok Go® and Spok Care Connect® platforms to enhance workflows for clinicians and support administrative compliance. Our customers send over 100 million messages each month through their Spok® solutions. When seconds count and patients' lives are at stake, Spok enables smarter, faster clinical communication. For more information, visit spok.com or follow @spoktweets on Twitter.
Spok is a trademark of Spok Holdings, Inc. Spok Go and Spok Care Connect are trademarks of Spok, Inc.
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: adjusted operating expenses and adjusted EBITDA. Adjusted operating expenses excludes depreciation, amortization and accretion and includes capitalized software development costs. Adjusted EBITDA represents net income/(loss) before interest income/expense, income tax expense/benefit, depreciation, amortization and accretion expense and stock-based compensation expense and includes capitalized software development costs.
We believe that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to Spok's financial condition and results of operations. We use these non-GAAP measures for financial, operational, and budgetary decision-making purposes, to understand and evaluate our core operating performance and trends, and to generate future operating plans. We believe that these non-GAAP financial measures permit us to more thoroughly analyze key financial metrics used to make operational decisions and allow us to assess our core operating results. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other software companies who present similar non-GAAP financial measures. We adjust for certain items because we do not regard these costs as reflective of normal costs related to the ongoing operation of the business in the ordinary course. In general, these items possess one or more of the following characteristics: non-cash expenses, factors outside of our
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control, items that are non-operational in nature, and unusual items not expected to occur in the normal course of business.
We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures, which are included in this press release, and not to rely on any single financial measure to evaluate our business.

Safe Harbor Statement under the Private Securities Litigation Reform Act
Statements contained herein or in prior press releases which are not historical fact, such as statements regarding Spok’s future operating and financial performance, are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that may cause Spok’s actual results to be materially different from the future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expectations include, but are not limited to, risks related to the COVID-19 pandemic and its effect on our business and the economy, other economic conditions such as recessionary economic cycles, higher interest rates, inflation and higher levels of unemployment, our ability to effectively develop, introduce and deploy our integrated communications platform and collaboration platform, Spok Go, declining demand for paging products and services, continued demand for our software products and services, our dependence on the U.S. healthcare industry, our ability to develop additional software solutions for our customers and manage our development as a global organization, the ability to manage operating expenses, particularly third-party consulting services and research and development costs, future capital needs, competitive pricing pressures, competition from traditional paging services, other wireless communications services and other software providers, many of which are substantially larger and have much greater financial and human capital resources, changes in customer purchasing priorities or capital expenditures, government regulation of our products and services and the healthcare and health insurance industries, reliance upon third-party providers for certain equipment and services, unauthorized breaches or failures in cybersecurity measures adopted by us and/or included in our products and services, the effects of changes in accounting policies or practices, our ability to realize the benefits associated with our deferred tax assets, future impairments of our long-lived assets, amortizable intangible assets and goodwill, the effects of our limited-duration shareholder rights plan, and the outcome of Spok's strategic alternatives review, as well as other risks described from time to time in our periodic reports and other filings with the Securities and Exchange Commission. Although Spok believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its
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expectations will be attained. Spok disclaims any intent or obligation to update any forward-looking statements.



Tables to Follow
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SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)
(Unaudited and in thousands except share, per share amounts and ARPU)
For the three months endedFor the nine months ended
9/30/20219/30/20209/30/20219/30/2020
Revenue:
Wireless$19,644 $20,828 $59,623 $63,293 
Software16,207 16,865 47,987 47,406 
Total revenue35,851 37,693 107,610 110,699 
Operating expenses:
Cost of revenue7,520 6,544 21,734 20,709 
Research and development4,178 3,459 12,962 11,662 
Technology operations7,439 7,357 21,778 22,472 
Selling and marketing5,165 4,272 15,045 14,463 
General and administrative12,538 10,994 35,245 33,056 
Depreciation, amortization and accretion2,568 2,335 7,752 6,553 
Total operating expenses39,408 34,961 114,516 108,915 
% of total revenue109.9 %92.8 %106.4 %98.4 %
Operating (loss) income(3,557)2,732 (6,906)1,784 
% of total revenue(9.9)%7.2 %(6.4)%1.6 %
Interest income141 127 263 636 
Other income10 151 13 113 
(Loss) income before income taxes(3,406)3,010 (6,630)2,533 
Benefit from (provision for) income taxes912 155 1,120 (149)
Net (loss) income$(2,494)$3,165 $(5,510)$2,384 
Basic net (loss) income per common share$(0.13)$0.17 $(0.28)$0.13 
Diluted net (loss) income per common share(0.13)0.16 (0.28)0.12 
Basic weighted average common shares outstanding19,464,893 19,051,502 19,378,543 19,008,969 
Diluted weighted average common shares outstanding19,464,893 19,208,452 19,378,543 19,273,243 
Cash dividends declared per common share0.125 0.125 0.375 0.375 
Key statistics:
Units in service853 898 853 898 
Average revenue per unit (ARPU)$7.29 $7.34 $7.33 $7.31 
Bookings$17,116 $21,414 $44,750 $52,465 
Backlog$45,584 $51,708 $45,584 $51,708 
(a) Slight variations in totals are due to rounding.



SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)
(Unaudited and in thousands except share, per share amounts and ARPU)
For the three months ended
9/30/20216/30/20213/31/202112/31/20209/30/20206/30/20203/31/202012/31/2019
Revenue:
Wireless$19,644 $19,859 $20,120 $20,300 $20,828 $21,078 $21,386 $21,615 
Software16,207 15,864 15,916 17,180 16,865 14,661 15,881 17,933 
Total revenue35,851 35,723 36,036 37,480 37,693 35,739 37,267 39,548 
Operating expenses:
Cost of revenue7,520 6,973 7,241 7,833 6,544 5,901 8,264 8,051 
Research and development4,178 4,278 4,506 4,166 3,459 2,754 5,449 7,132 
Technology operations7,439 7,087 7,252 7,371 7,357 7,212 7,904 8,083 
Selling and marketing5,165 4,980 4,900 5,004 4,272 3,831 6,361 5,891 
General and administrative12,538 11,557 11,150 10,046 10,994 10,810 11,251 11,531 
Depreciation, amortization and accretion2,568 2,457 2,727 2,503 2,335 2,072 2,146 2,250 
Goodwill impairment— — — 25,007 — — — 8,849 
Total operating expenses39,408 37,332 37,776 61,930 34,961 32,580 41,375 51,787 
% of total revenue109.9 %104.5 %104.8 %165.2 %92.8 %91.2 %111.0 %130.9 %
Operating (loss) income(3,557)(1,609)(1,740)(24,450)2,732 3,159 (4,108)(12,239)
% of total revenue(9.9)%(4.5)%(4.8)%(65.2)%7.2 %8.8 %(11.0)%(30.9)%
Interest income141 61 61 51 127 146 363 350 
Other income (expense)10 29 (27)95 151 101 (137)206 
(Loss) income before income taxes(3,406)(1,519)(1,706)(24,304)3,010 3,406 (3,882)(11,683)
Benefit from (provision for) income taxes912 800 (591)(22,306)155 353 (657)2,172 
Net (loss) income$(2,494)$(719)$(2,297)$(46,610)$3,165 $3,759 $(4,539)$(9,511)
Basic net (loss) income per common share$(0.13)$(0.04)$(0.12)$(2.44)$0.17 $0.20 $(0.24)$(0.50)
Diluted net (loss) income per common share(0.13)(0.04)(0.12)(2.44)0.16 0.20 (0.24)(0.50)
Basic weighted average common shares outstanding19,464,893 19,395,364 19,272,786 19,088,329 19,051,502 19,016,853 18,958,716 18,860,020 
Diluted weighted average common shares outstanding19,464,893 19,395,364 19,272,786 19,088,329 19,208,452 19,115,148 18,958,716 18,860,020 
Key statistics:
Units in service853 869 874 885 898 915 926 938 
Average revenue per unit (ARPU)$7.29 $7.32 $7.34 $7.30 $7.34 $7.24 $7.31 $7.33 
Bookings$17,116 $13,037 $14,597 $16,528 $21,414 $15,411 $15,639 $21,932 
Backlog$45,584 $45,632 $48,849 $50,504 $51,708 $48,441 $49,052 $50,553 
(a) Slight variations in totals are due to rounding.


SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (a)
(In thousands)
9/30/202112/31/2020
ASSETS(Unaudited)
Current assets:
Cash and cash equivalents$37,461 $48,729 
Short term investments29,998 29,995 
Accounts receivable, net26,979 29,934 
Prepaid expenses9,169 8,958 
Other current assets896 1,269 
Total current assets104,503 118,885 
Non-current assets:
Property and equipment, net7,834 7,815 
Operating lease right-of-use assets16,113 14,016 
Capitalized software development, net14,638 10,179 
Goodwill99,175 99,175 
Intangible assets, net— 417 
Deferred income tax assets, net26,739 25,826 
Other non-current assets750 978 
Total non-current assets165,249 158,406 
Total assets$269,752 $277,291 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$4,521 $6,685 
Accrued compensation and benefits15,190 14,103 
Deferred revenue26,767 27,686 
Operating lease liabilities5,643 5,264 
Other current liabilities5,239 3,702 
Total current liabilities57,360 57,440 
Non-current liabilities:
Asset retirement obligations7,450 7,289 
Operating lease liabilities11,951 9,456 
Other non-current liabilities1,377 2,493 
Total non-current liabilities20,778 19,238 
Total liabilities78,138 76,678 
Commitments and contingencies
Stockholders' equity:
Preferred stock$— $— 
Common stock2 2 
Additional paid-in capital96,088 91,780 
Accumulated other comprehensive loss(1,598)(1,452)
Retained earnings97,122 110,283 
Total stockholders' equity191,614 200,613 
Total liabilities and stockholders' equity$269,752 $277,291 
(a) Slight variations in totals are due to rounding.



SPOK HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a)
(Unaudited and in thousands)
For the nine months ended
9/30/20219/30/2020
Operating activities:
Net (loss) income$(5,510)$2,384 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, amortization and accretion7,752 6,553 
Deferred income tax (benefit) expense(907)15 
Stock-based compensation6,036 4,160 
Provisions for doubtful accounts, service credits and other765 914 
Changes in assets and liabilities:
Accounts receivable2,165 (1,019)
Prepaid expenses and other assets202 1,726 
Net operating lease liabilities778 (50)
Accounts payable, accrued liabilities and other300 3,591 
Deferred revenue(2,053)2,680 
Net cash provided by operating activities9,528 20,954 
Investing activities:
Purchases of property and equipment(3,103)(2,824)
Capitalized software development(8,239)(8,206)
Purchase of short-term investments(44,990)(44,870)
Maturity of short-term investments45,000 45,000 
Net cash used in investing activities(11,332)(10,900)
Financing activities:
Cash distributions to stockholders(7,590)(7,388)
Proceeds from issuance of common stock under the Employee Stock Purchase Plan132 166 
Purchase of common stock for tax withholding on vested equity awards(1,860)(903)
Net cash used in financing activities(9,318)(8,125)
Effect of exchange rate on cash and cash equivalents(146)(55)
Net (decrease) increase in cash and cash equivalents(11,268)1,874 
Cash and cash equivalents, beginning of period48,729 47,361 
Cash and cash equivalents, end of period$37,461 $49,235 
Supplemental disclosure:
Income taxes (refunds received) paid$(165)$148 
(a) Slight variations in totals are due to rounding.



SPOK HOLDINGS, INC.
CONSOLIDATED REVENUE
SUPPLEMENTAL INFORMATION (a)
(Unaudited and in thousands)
For the three months ended
9/30/20216/30/20213/31/202112/31/20209/30/20206/30/20203/31/202012/31/2019
Revenue
Paging$18,844 $19,135 $19,353 $19,513 $19,961 $19,990 $20,451 $20,826 
Non-paging$800 $724 $767 $787 $867 $1,088 $935 $789 
Total wireless revenue$19,644 $19,859 $20,120 $20,300 $20,828 $21,078 $21,386 $21,615 
License$1,674 $818 $1,507 $1,486 $1,988 $749 $955 $1,711 
Services$4,159 $4,865 $4,354 $4,778 $4,772 $3,812 $4,549 $4,947 
Equipment$596 $482 $616 $961 $554 $601 $725 $1,125 
Subscription$133 $90 $45 $42 $24 $— $— $— 
Operations revenue$6,562 $6,255 $6,522 $7,267 $7,338 $5,162 $6,229 $7,783 
Maintenance revenue$9,645 $9,609 $9,394 $9,913 $9,527 $9,499 $9,652 $10,150 
Total software revenue$16,207 $15,864 $15,916 $17,180 $16,865 $14,661 $15,881 $17,933 
Total revenue$35,851 $35,723 $36,036 $37,480 $37,693 $35,739 $37,267 $39,548 
(a) Slight variations in totals are due to rounding.


SPOK HOLDINGS, INC.
CONSOLIDATED OPERATING EXPENSES
SUPPLEMENTAL INFORMATION (a)
(Unaudited and in thousands)
For the three months ended
9/30/20216/30/20213/31/202112/31/20209/30/20206/30/20203/31/202012/31/2019
Cost of revenue
Payroll and related$5,435 $4,920 $5,369 $5,447 $4,941 $4,350 $5,785 $5,222 
Cost of sales1,414 1,427 1,251 1,740 1,064 1,098 1,940 2,278 
Stock-based compensation250 285 322 136 148 134 119 42 
Other421 341 299 510 391 319 420 509 
Total cost of revenue7,520 6,973 7,241 7,833 6,544 5,901 8,264 8,051 
Research and development
Payroll and related4,291 4,333 4,475 4,358 4,147 4,115 4,761 5,056 
Outside services1,759 2,060 2,277 2,358 2,113 1,803 1,584 1,742 
Capitalized software development(2,621)(2,698)(2,920)(3,046)(2,906)(3,596)(1,705)— 
Stock-based compensation435 305 475 246 240 243 236 113 
Other314 278 199 250 (135)189 573 221 
Total research and development4,178 4,278 4,506 4,166 3,459 2,754 5,449 7,132 
Technology operations
Payroll and related2,585 2,323 2,467 2,467 2,246 2,213 2,712 2,656 
Site rent3,122 3,143 3,196 3,313 3,467 3,399 3,398 3,669 
Telecommunications828 825 837 857 949 961 1,001 1,026 
Stock-based compensation139 131 137 48 52 47 43 32 
Other765 665 615 686 643 592 750 700 
Total technology operations7,439 7,087 7,252 7,371 7,357 7,212 7,904 8,083 
Selling and marketing
Payroll and related3,365 3,161 3,135 2,912 2,773 2,538 3,583 3,382 
Commissions924 1,244 1,105 1,178 1,059 852 1,212 1,158 
Stock-based compensation234 254 319 192 208 194 172 164 
Advertising and events527 247 161 539 151 160 784 1,034 
Other115 74 180 183 81 87 610 153 
Total selling and marketing5,165 4,980 4,900 5,004 4,272 3,831 6,361 5,891 
General and administrative
Payroll and related3,911 3,564 3,818 3,373 3,476 3,355 4,134 3,974 
Stock-based compensation958 806 986 726 968 744 612 770 
Facility rent, office, and technology costs2,692 2,484 2,480 2,412 178 628 43 56 
Outside services3,078 2,219 1,825 1,584 2,259 2,276 2,068 1,952 
Taxes, licenses and permits1,003 1,117 1,081 484 2,148 2,043 2,036 2,350 
Bad debt(29)328 106 202 994 804 859 1,000 
Other925 1,039 854 1,265 971 960 1,499 1,429 
Total general and administrative12,538 11,557 11,150 10,046 10,994 10,810 11,251 11,531 
Depreciation, amortization and accretion2,568 2,457 2,727 2,503 2,335 2,072 2,146 2,250 
Goodwill impairment— — — 25,007 — — — 8,849 
Operating expenses$39,408 $37,332 $37,776 $61,930 $34,961 $32,580 $41,375 $51,787 
Capital expenditures$905 $1,480 $727 $638 $934 $846 $1,063 $679 
(a) Slight variations in totals are due to rounding.


SPOK HOLDINGS, INC.
UNITS IN SERVICE ACTIVITY, MARKET SEGMENT, CHURN
AND AVERAGE REVENUE PER UNIT (ARPU) (a)
(Unaudited and in thousands)
For the three months ended
9/30/20216/30/20213/31/202112/31/20209/30/20206/30/20203/31/202012/31/2019
Paging units in service
Beginning units in service (000's)869 874 885 898 915 926 938 955 
Gross placements23 31 20 20 25 35 24 22 
Gross disconnects(39)(36)(31)(33)(42)(46)(36)(39)
Net change(16)(5)(11)(13)(17)(11)(12)(17)
Ending units in service853 869 874 885 898 915 926 938 
End of period units in service % of total (b)
Healthcare84.6 %84.5 %84.1 %83.6 %83.7 %83.6 %82.6 %82.4 %
Government4.8 %4.9 %4.8 %5.3 %5.3 %5.5 %5.4 %5.4 %
Large enterprise4.1 %4.1 %4.3 %4.3 %4.3 %4.4 %5.5 %5.5 %
Other(b)6.4 %6.4 %6.8 %6.8 %6.6 %6.6 %6.5 %6.6 %
Total100.0 %100.0 %100.0 %100.0 %100.0 %100.0 %100.0 %100.0 %
Account size ending units in service (000's)
1 to 100 units57 58 59 61 63 65 67 69 
101 to 1,000 units154 155 163 167 167 165 171 173 
>1,000 units642 656 652 657 668 685 688 696 
Total853 869 874 885 898 915 926 938 
Account size net loss rate(c)
1 to 100 units(1.7)%(1.7)%(3.3)%(3.2)%(2.9)%(3.1)%(3.0)%(3.8)%
101 to 1,000 units(0.6)%(4.9)%(2.4)%— %1.5 %(4.2)%(1.0)%(1.0)%
>1,000 units(2.1)%0.6 %(0.8)%(1.6)%(2.5)%(0.4)%(1.2)%(1.8)%
Total(1.8)%(0.6)%(1.2)%(1.4)%(1.9)%(1.3)%(1.3)%(1.8)%
Account size ARPU
1 to 100 units$11.67 $11.69 $11.72 $11.62 $11.80 $11.65 $12.01 $11.99 
101 to 1,000 units8.38 8.35 8.33 8.35 8.37 8.24 8.34 8.31 
>1,000 units6.65 6.68 6.68 6.62 6.67 6.57 6.59 6.62 
Total$7.29 $7.32 $7.34 $7.30 $7.34 $7.24 $7.31 $7.33 
(a) Slight variations in totals are due to rounding.
(b) Other includes hospitality, resort and indirect units
(c) Net loss rate is net current period placements and disconnected units in service divided by prior period ending units in service.



SPOK HOLDINGS, INC.
RECONCILIATION OF NET (LOSS) INCOME TO EBITDA (a)
(Unaudited and in thousands)
For the three months endedFor the nine months ended
9/30/20219/30/20209/30/20219/30/2020
Net (loss) income$(2,494)$3,165 $(5,510)$2,384 
Add back:
(Benefit from) provision for income taxes(912)(155)(1,120)149 
Other income(10)(151)(13)(113)
Interest income(141)(127)(263)(636)
Operating (loss) income(3,557)2,732 (6,906)1,784 
Depreciation, amortization and accretion2,568 2,335 7,752 6,553 
EBITDA$(989)$5,067 $846 $8,337 
Capitalized software development costs(2,621)(2,906)(8,239)(8,206)
Stock-based compensation
2,016 1,616 6,036 4,160 
Adjusted EBITDA$(1,594)$3,777 $(1,357)$4,291 
(a) Slight variations in totals are due to rounding.

RECONCILIATION OF OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (a)
(Unaudited and in thousands)
For the three months endedFor the nine months ended
9/30/20219/30/20209/30/20219/30/2020
Operating expenses$39,408 $34,961 $114,516 $108,915 
Add back:
Depreciation, amortization and accretion(2,568)(2,335)(7,752)(6,553)
Capitalized software development costs2,621 2,906 8,239 8,206 
Adjusted operating expenses$39,461 $35,532 $115,003 $110,568 
(a) Slight variations in totals are due to rounding.

(Unaudited and in millions)
Current Guidance
Full Year 2021
Operating expenses$149.7 to$155.7 
Add back:
Depreciation, amortization and accretion(10.2)(10.2)
Capitalized software development costs11.5 11.5 
Adjusted operating expenses$151.0 $157.0