GICS Sector : Healthcare
Spok Holdings, Inc., through its subsidiary, Spok, Inc., provides healthcare communication solutions in the United States, Europe, Canada, Australia, Asia, and the Middle East.It delivers clinical information to care teams when and where it matters to enhance patient outcomes.The company offers subscriptions to one-way or two-way messaging services; and ancillary services, such as voicemail, and equipment loss or maintenance protection services, as well as sells devices to resellers who lease or resell them to their subscribers.
Spok Holdings reported a GAAP net income of $3.2 million or $0.15 per diluted share in Q3 2025, down from $3.7 million or $0.18 per diluted share in the same quarter last year. Total GAAP revenue was $33.9 million, a decline of 2.9% year-over-year, comprising wireless revenue of $17.8 million and software revenue of $16.1 million. The company's EPS missed analyst estimates of $0.19. Adjusted EBITDA was $6.6 million, which covered the $6.4 million returned to stockholders in the form of dividend distributions.
Publication Date: Nov -19
The revenue decline was largely attributed to the "lumpy" nature of license revenue, which dropped 55% year-over-year. However, Calvin Rice, Spok's management, explained that this variability is not a cause for concern and shouldn't be expected to decline further. The company reaffirmed its full-year guidance, expecting total revenue to range from $138 million to $143.5 million, with adjusted EBITDA between $28.5 million and $32.5 million. Analysts estimate next year's revenue growth at 2.6%.
Spok's software solutions, including Spok Care Connect, continue to drive growth, with a robust pipeline and several large deals in the works. Management is bullish on the fourth quarter, expecting a strong performance after an "air pocket" in July to September. Research and development spending is expected to increase by 6% to 8% in 2026, reaching $13 million, focusing on consolidating the Care Connect suite and adding functionality.
With a P/E Ratio of 15.95 and a Dividend Yield of 9.7%, Spok Holdings appears to be offering a relatively attractive yield, supported by its consistent cash generation. The company's EV/EBITDA ratio is 9.5, indicating a reasonable valuation. The ROE of 10.95% and ROIC of 9.42% suggest a decent return on equity and invested capital, respectively. The Net Debt / EBITDA ratio is -0.53, highlighting Spok's net cash position.
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Spok Holdings' Wireless - Paging segment growth of 0.8% is driven by increasing demand for reliable and secure communication solutions in healthcare, government, and enterprise sectors. Additionally, the company's strategic investments in network infrastructure and technology upgrades have improved service quality, attracting and retaining customers.
Spok Holdings, Inc.'s Software - Maintenance segment growth of 0.9% is driven by increasing demand for healthcare IT solutions, strategic partnerships, and cost-cutting initiatives. Additionally, the company's focus on cloud-based services and cybersecurity solutions contributes to the growth. Furthermore, the need for hospitals and healthcare systems to comply with regulations, such as HIPAA, also fuels the demand for Spok's software maintenance services.
Spok Holdings' Software - Professional Services segment growth of 1.1% is driven by increasing demand for healthcare IT solutions, strategic partnerships, and expansion of existing customer relationships. Additionally, the company's focus on cloud-based offerings and cybersecurity services contributes to growth, as healthcare providers seek to improve patient care and protect sensitive data.
Spok Holdings, Inc.'s software license growth is driven by increasing demand for healthcare communication solutions, expansion into new markets, and strategic partnerships. The 1.2 growth rate is also attributed to the company's focus on innovation, enhancing customer experience, and providing integrated platforms for clinical workflows.
Spok Holdings' Wireless - Product and Other segment growth of 0.7% is driven by increasing demand for wireless communication solutions in healthcare, growth in software-enabled services, and strategic partnerships. Additionally, the company's focus on innovation, customer retention, and cost management efforts contribute to this moderate growth.
Spok Holdings, Inc.'s software-hardware segment growth of 0.9 is driven by increasing demand for healthcare communication solutions, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, such as its cloud-based offerings, and cost savings initiatives contribute to its growth.
A clinical communication platform that enables care teams to collaborate and coordinate patient care
A mobile app that enables clinicians to communicate and collaborate on-the-go
A secure messaging platform that enables clinicians to communicate with each other and with patients
A centralized platform that integrates with existing hospital systems to manage clinical communications
A speech recognition platform that enables clinicians to dictate patient information
Spok Holdings, Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the industry.
Spok Holdings, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are critical to its customers' operations, making it difficult for them to negotiate prices.
Spok Holdings, Inc. relies on a few key suppliers for critical components, giving them some bargaining power. However, the company's size and scale of operations mitigate this risk to some extent.
The threat of new entrants is low due to the high barriers to entry in the industry, including significant capital requirements and regulatory hurdles.
The industry in which Spok Holdings, Inc. operates is highly competitive, with several established players competing for market share. This intense rivalry puts pressure on the company to innovate and differentiate its products and services.
| Value | |
|---|---|
| Debt Weight | 6.34% |
| Debt Cost | 3.95% |
| Equity Weight | 93.66% |
| Equity Cost | 5.24% |
| WACC | 5.16% |
| Leverage | 6.77% |
Value: 5.5
Growth: 4.9
Quality: 7.9
Yield: 10.0
Momentum: 7.5
Volatility: 6.7
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