# Spok Holdings, Inc (SPOK)

Informational only - not investment advice.

CIK: 0001289945
SIC: 4812 Radiotelephone Communications
SIC breadcrumb: [Transportation, Communications, Electric, Gas, And Sanitary Services](/division/E/) > [Communications](/major-group/48/) > [SIC 4812 Radiotelephone Communications](/industry/4812/)
Latest 10-K filed: 2026-02-26
SEC page: https://www.sec.gov/edgar/browse/?CIK=1289945
Filing source: https://www.sec.gov/Archives/edgar/data/1289945/000128994526000010/spok-20251231.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 139708000 | USD | 2025 | 2026-02-26 |
| Net income | 15881000 | USD | 2025 | 2026-02-26 |
| Assets | 206111000 | USD | 2025 | 2026-02-26 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001289945.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  |  |  | 179,561,000 | 171,175,000 | 169,474,000 | 160,289,000 | 148,180,000 | 142,153,000 | 134,534,000 | 139,025,000 | 137,653,000 | 139,708,000 |
| Net income |  |  |  | 13,979,000 | -15,306,000 | -1,479,000 | -10,765,000 | -44,225,000 | -22,180,000 | 21,856,000 | 15,666,000 | 14,965,000 | 15,881,000 |
| Operating income |  |  |  | 22,153,000 | 10,706,000 | -3,173,000 | -15,809,000 | -22,665,000 | -27,718,000 | 238,000 | 21,228,000 | 18,965,000 | 19,710,000 |
| Diluted EPS | 1.25 | 0.94 | 3.98 |  |  |  | -0.56 | -2.32 | -1.14 | 1.09 | 0.77 | 0.73 | 0.75 |
| Operating cash flow |  |  |  | 37,551,000 | 15,515,000 | 10,315,000 | 11,693,000 | 26,163,000 | 7,968,000 | 6,456,000 | 26,184,000 | 28,922,000 | 28,949,000 |
| Capital expenditures |  |  |  | 6,254,000 | 9,214,000 | 5,915,000 | 4,837,000 | 3,455,000 | 4,393,000 | 3,776,000 | 3,417,000 | 3,209,000 | 3,753,000 |
| Dividends paid |  |  |  | 10,287,000 | 15,234,000 | 10,064,000 | 9,819,000 | 9,771,000 | 10,025,000 | 25,011,000 | 25,642,000 | 26,381,000 | 27,259,000 |
| Assets |  |  |  | 388,087,000 | 348,004,000 | 327,712,000 | 319,872,000 | 277,291,000 | 248,154,000 | 244,477,000 | 227,684,000 | 217,103,000 | 206,111,000 |
| Liabilities |  |  |  | 66,000,000 | 57,475,000 | 53,158,000 | 69,778,000 | 76,678,000 | 74,463,000 | 73,380,000 | 63,913,000 | 62,357,000 | 59,732,000 |
| Stockholders' equity |  |  |  | 322,087,000 | 290,529,000 | 274,554,000 | 250,094,000 | 199,632,000 | 172,710,000 | 171,097,000 | 163,771,000 | 154,746,000 | 146,379,000 |
| Cash and cash equivalents |  |  |  | 121,825,000 | 103,179,000 | 83,343,000 | 47,361,000 | 48,729,000 | 44,583,000 | 35,754,000 | 31,989,000 | 29,145,000 | 25,280,000 |
| Free cash flow |  |  |  | 31,297,000 | 6,301,000 | 4,400,000 | 6,856,000 | 22,708,000 | 3,575,000 | 2,680,000 | 22,767,000 | 25,713,000 | 25,196,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin |  |  |  | 7.79% | -8.94% | -0.87% | -6.72% | -29.85% | -15.60% | 16.25% | 11.27% | 10.87% | 11.37% |
| Operating margin |  |  |  | 12.34% | 6.25% | -1.87% | -9.86% | -15.30% | -19.50% | 0.18% | 15.27% | 13.78% | 14.11% |
| Return on equity |  |  |  | 4.34% | -5.27% | -0.54% | -4.30% | -22.15% | -12.84% | 12.77% | 9.57% | 9.67% | 10.85% |
| Return on assets |  |  |  | 3.60% | -4.40% | -0.45% | -3.37% | -15.95% | -8.94% | 8.94% | 6.88% | 6.89% | 7.71% |
| Liabilities / equity |  |  |  | 0.20 | 0.20 | 0.19 | 0.28 | 0.38 | 0.43 | 0.43 | 0.39 | 0.40 | 0.41 |
| Current ratio |  |  |  | 2.77 | 2.99 | 2.91 | 2.30 | 2.07 | 1.71 | 1.29 | 1.33 | 1.26 | 1.18 |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001289945.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q2 | 2022-06-30 |  |  | 0.10 | reported discrete quarter |
| 2022-Q3 | 2022-09-30 |  |  | 0.15 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 0.15 | reported discrete quarter |
| 2023-Q2 | 2023-03-31 |  | 3,117,000 |  | reported discrete quarter |
| 2023-Q2 | 2023-06-30 | 36,463,000 |  | 0.23 | reported discrete quarter |
| 2023-Q3 | 2023-06-30 |  | 4,733,000 |  | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 35,428,000 |  | 0.22 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 33,953,000 | 3,365,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 34,909,000 | 4,236,000 | 0.21 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 |  | 4,236,000 |  | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 33,982,000 |  | 0.17 | reported discrete quarter |
| 2024-Q3 | 2024-06-30 |  | 3,425,000 |  | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 34,870,000 |  | 0.18 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 33,892,000 | 3,644,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 36,294,000 | 5,196,000 | 0.25 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 |  | 5,196,000 |  | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 35,686,000 |  | 0.22 | reported discrete quarter |
| 2025-Q3 | 2025-06-30 |  | 4,552,000 |  | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 33,867,000 |  | 0.15 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 33,861,000 | 2,930,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 33,226,000 | 1,987,000 | 0.09 | reported discrete quarter |

## Macro Cross-References
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- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1289945/000128994526000027/spok-20260331.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-04-30
Report date: 2026-03-31

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q ("Quarterly Report") contains forward-looking statements and information relating to Spok Holdings, Inc. and its subsidiaries (collectively, “we,” "us," “Spok,” “our” or the “Company”) that set forth anticipated results based on management’s current plans, known trends and assumptions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “target,” “forecast” and similar expressions, as they relate to Spok are forward-looking statements.

Although these statements are based upon current plans, known trends and assumptions that management considers reasonable, they are subject to certain risks, uncertainties and assumptions, including, but not limited to, those discussed in this section and "Risk Factors" below and under the captions “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”),” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Annual Report"). Should known or unknown risks or uncertainties materialize,

17

known trends change, or underlying assumptions prove inaccurate, actual results or outcomes may differ materially from past results and those described herein as anticipated, believed, estimated, expected, intended, targeted or forecasted. Investors are cautioned not to place undue reliance on these forward-looking statements.

The Company undertakes no obligation to update forward-looking statements. Investors are advised to consult all further disclosures the Company makes in its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that it will file with the SEC. Also note that, in the 2025 Annual Report, the Company provides a cautionary discussion of risks, uncertainties and possibly inaccurate assumptions relevant to its business. These are factors that, individually or in the aggregate, could cause the Company’s actual results to differ materially from past results as well as those results that may be anticipated, believed, estimated, expected, intended, targeted or forecasted. It is not possible to predict or identify all such risk factors. Consequently, investors should not consider the risk factor discussion to be a complete discussion of all of the potential risks or uncertainties that could affect Spok's business, statement of operations or financial condition, subsequent to the filing of this Quarterly Report.

Overview

The following MD&A is intended to help the reader understand the results of operations and financial condition of Spok. This MD&A is provided as a supplement to, and should be read in conjunction with, our 2025 Annual Report and our unaudited Condensed Consolidated Financial Statements and accompanying notes. A reference to a “Note” in this section refers to the accompanying Unaudited Notes to Condensed Consolidated Financial Statements.

Spok, acting through its indirect wholly owned operating subsidiary, Spok, Inc., delivers smart, reliable clinical communication and collaboration solutions to organizations, primarily in the United States healthcare industry, to help protect the health, well-being and safety of individuals. Organizations rely on Spok for workflow improvement, secure messaging, paging services, contact center optimization and public safety response.

Business

See Note 1, "Organization and Significant Accounting Policies" in Item 1 of Part I of this Quarterly Report and Item 1. "Business" of Part I of the 2025 Annual Report, which describe our business in further detail.

Subsequent to quarter end, in April 2026, we announced a strategic realignment designed to further enhance our cost optimization efforts, as described in Note 15, "Subsequent Events" in the Notes to Condensed Consolidated Financial Statements. These actions will enable us to direct resources towards continued investment in our Care Connect Suite and artificial intelligence initiatives, while sustaining our commitment to returning cash to stockholders. This realignment will eliminate approximately 10% of our workforce, which will result in annualized savings of over $6.0 million in payroll and related expenses and other operating expenses. We expect to record one-time pre-tax costs of approximately $1.6 million to $2.0 million primarily in severance and personnel related costs in the second and third quarters of 2026, with such charges expected to be substantially complete by the third quarter of 2026.

18

Results of Operations

The following table is a summary of our Condensed Consolidated Statement of Operations for the three months ended March 31, 2026 and 2025:

For the Three Months Ended March 31,

Change

(Dollars in thousands)

2026

2025

Total

%

Revenue:

Wireless revenue

$

17,486 

$

18,474 

$

(988)

(5.3)

%

Software revenue

15,740 

17,820 

(2,080)

(11.7)

%

Total revenue

33,226 

36,294 

(3,068)

(8.5)

%

Operating expenses:

Cost of revenue (exclusive of items shown separately below)

7,729 

7,284 

445 

6.1 

%

Research and development

3,457 

3,094 

363 

11.7 

%

Technology operations

6,162 

6,190 

(28)

(0.5)

%

Selling and marketing

4,488 

4,925 

(437)

(8.9)

%

General and administrative

7,632 

7,867 

(235)

(3.0)

%

Depreciation and accretion

992 

859 

133 

15.5 

%

Severance and restructuring

322 

57 

265 

464.9 

%

Total operating expenses

30,782 

30,276 

506 

1.7 

%

Operating income

2,444 

6,018 

(3,574)

(59.4)

%

Interest income

174 

219 

(45)

(20.5)

%

Other income

5 

22 

(17)

(77.3)

%

Income before income taxes

2,623 

6,259 

(3,636)

(58.1)

%

Provision for income taxes

(636)

(1,063)

427 

(40.2)

%

Net income

$

1,987 

$

5,196 

$

(3,209)

(61.8)

%

Supplemental Information

Full-Time Equivalent ("FTE") Employees

415 

418 

(3)

(0.7)

%

Active transmitters

2,803 

2,966 

(163)

(5.5)

%

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.

We develop, sell and support enterprise-wide systems for healthcare, government, large enterprise and other organizations needing to automate, centralize and standardize their approach to clinical communications and collaboration. Our solutions can be found in prominent hospitals, large government agencies, leading public safety institutions, colleges and universities, large hotels, resorts and casinos, and well-known manufacturers. Our primary market is the healthcare industry, particularly hospitals. While we have historically identified hospitals with 200 or more beds as the primary targets for our software solutions, as well as our paging services, we have expanded our focus to include smaller hospitals with shorter sales cycles, including academic medical centers.

19

Revenue generated by wireless messaging services (including voice mail, personalized greetings, message storage and retrieval, equipment, maintenance plans and/or equipment loss protection for both one-way and two-way messaging subscribers) is presented as wireless revenue in our Condensed 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 Condensed Consolidated Statements of Operations. Our software is licensed to end users under an industry standard software license agreement.

Refer to Note 5, "Revenue, Deferred Revenue and Prepaid Commissions" in the Notes to Condensed Consolidated Financial Statements for additional information on our wireless and software revenue streams.

The table below details revenue for the periods stated:

For the Three Months Ended March 31,

Change

(Dollars in thousands)

2026

2025

Total

%

Revenue - wireless:

Paging revenue

$

16,569 

$

17,607 

$

(1,038)

(5.9)

%

Product and other revenue

917 

867 

50 

5.8 

%

Total wireless revenue

17,486 

18,474 

(988)

(5.3)

%

Revenue - software:

License

1,362 

2,631 

(1,269)

(48.2)

%

Professional services - projects

3,328 

4,471 

(1,143)

(25.6)

%

Professional services - managed services

2,059 

1,315 

744 

56.6 

%

Hardware

186 

321 

(135)

(42.1)

%

Maintenance and subscription

8,805 

9,082 

(277)

(3.0)

%

Total software revenue

15,740 

17,820 

(2,080)

(11.7)

%

Total revenue

$

33,226 

$

36,294 

$

(3,068)

(8.5)

%

Wireless Revenue

Wireless revenue is generally reflective of the number of units in service and measured monthly as Average Revenue Per User ("ARPU"). On a consolidated basis, ARPU is affected by several factors, including the mix of units in service and the pricing of the various components of our services. The number of units in service changes based on subscribers added, referred to as gross placements, less subscriber cancellations, or disconnects.

Wireless revenue decreased during the three months ended March 31, 2026, compared to the same period in 2025, primarily due to a decrease in paging revenue. The decrease in paging revenue was primarily driven by secular decreases in our wireless units in service, from 705 thousand units as of March 31, 2025 to 657 thousand units as of March 31, 2026. This decrease was partially offset by an increase in ARPU, as a result of price increases initiated in September of 2025. For the three months ended March 31, 2026, ARPU was $8.29, compared to $8.24 for the same period in 2025.

The decreases in paging revenue during the three months ended March 31, 2026, compared to the same period in 2025, was partially offset by an increase in product and other revenue. Product and other revenue includes one-time fees for customers that cancel our services and do not return their equipment within the allotted time-frame, as contractually required.

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.

20

The following reflects the impact of subscribers and ARPU on the change in paging revenue:

For the Three Months Ended March 31,

Change Due To:

(in thousands)

2026

2025

Change

ARPU

Units

Paging revenue

$

16,569 

$

17,607 

$

(1,038)

$

102 

$

(1,140)

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, to increase our revenue potential. These service offerings, along with the nominal increases in the standard rate, are designed to mitigate the decline in our wireless revenue. We will continue to explore ways to innovate and provide customers with 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. Our software projects generally

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related notes and the discussion under "Organization and Significant Accounting Policies” (refer to Note 1 in the Notes to the Consolidated Financial Statements), which describes key estimates and assumptions we make in the preparation of our Consolidated Financial Statements; the cautionary language that appears under the title "Forward Looking Statements" immediately following the Table of Contents; "Item 1. Business," which describes our operations; and "Item 1A. Risk Factors," which describes key risks associated with our operations and markets in which we operate. A reference to a "Note" in this section refers to the accompanying Notes to Consolidated Financial Statements.

Overview and Highlights

We offer a focused suite of unified clinical communication 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. Our customers rely on Spok for workflow improvement, secure texting, paging services, contact center optimization and public safety response. Our product offerings are capable of addressing a customer’s clinical communications needs. We develop, sell and support enterprise-wide systems for healthcare and other organizations needing to automate, centralize and standardize their approach to clinical communications. While our primary market has been the healthcare industry with a focus on prominent hospitals, our solutions can be found in prominent hospitals, large government agencies, leading public safety institutions, colleges and universities, large hotels, resorts and casinos and well-known manufacturers.

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Revenue generated by wireless messaging services (including voice mail, personalized greetings, message storage and retrieval, equipment, maintenance plans and/or equipment loss protection to both one-way and two-way messaging subscribers) is presented as wireless 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. 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. For 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. 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

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expenses from general and administrative to the applicable functional categories for all periods presented. These reclassifications had no effect on the reported results of operations or the statement of financial position.

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.

We develop, sell and support enterprise-wide systems for healthcare, government, and large enterprise and other organizations needing to automate, centralize and standardize their approach to clinical communications and collaboration. Our solutions can be found in prominent hospitals, large government agencies, leading public safety institutions, colleges and universities, large hotels, resorts and casinos and well-known manufacturers. Our primary market is the healthcare industry, particularly hospitals. While we have historically identified hospitals with 200 or more beds as the primary targets for our software solutions, as well as our paging services, we have recently expanded our focus to include smaller hospitals with shorter sales cycles, including academic medical centers.

Revenue generated by wireless messaging services (including voice mail, personalized greetings, message storage and retrieval, equipment, maintenance plans and/or equipment loss protection to both one-way and two-way messaging subscribers) is presented as wireless 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. Our software is licensed to end users under an industry standard software license agreement.

Refer to Note 3, "Revenue, Deferred Revenue and Prepaid Commissions," in the Notes to Consolidated Financial Statements for additional information on our wireless and software revenue streams.

The table below details total revenue for the periods stated:

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(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. Paging revenue consists primarily of recurring fees associated with the provision of messaging services and fees for paging devices and is net of a provision for service credits. Product and other revenue reflects system sales, sales of paging devices and charges for devices that are not returned and are net of anticipated credits. See "Item 1. Business" for more details.

We offer subscriptions to one-way or two-way messaging services for a periodic (monthly, quarterly, semiannual, or annual) service fee. The level of service fees is generally based upon the type of service provided, the geographic area covered, the number of devices provided to the customer and the period of commitment. 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. In addition, subscribers either contract to use a messaging device that we own and provide for an additional fixed monthly fee or they own the device used, after either purchasing it either from us or from another vendor.

We offer exclusive one-way (T5) and two-way (T52) alphanumeric pagers, which are configurable to support unencrypted or encrypted operation. When configured for encryption, they utilize AES-128 bit encryption, screen locking and remote wipe capabilities. With encryption enabled, these new secure paging devices enhance our service offerings to the healthcare community by adding HIPAA security capabilities to the low cost, highly reliable and availability benefits of paging. We also offer ancillary services, such as voicemail and equipment loss or maintenance protection, which help increase the monthly recurring revenue we receive along with these traditional messaging services.

Wireless revenue is generally reflective of the number of units in service and measured monthly as Average Revenue Per User ("ARPU"). On a consolidated basis, ARPU is affected by several factors, including the mix of units in service and the pricing of the various components of our services. The number of units in service changes based on subscribers added, referred to as gross placements, less subscriber cancellations, or disconnects.

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. 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. 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. 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.

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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 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. 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. Our software projects generally originate from fixed-bid contracts, although many involve a protracted sales cycle and may result in unforeseen complexity and deviation from the original scope. The time needed to complete projects, therefore, may not align with our original expectations, which affects our backlog. As a result, software revenue may fluctuate on a short-term basis, and we generally evaluate longer-term trends when managing this business.

Revenue items impacted by timing generally relate to specific renewal contracts that do not have auto-renewal terms and for which we must negotiate at the end of each term. We are generally precluded from recognizing revenue on these contracts until new terms have been agreed to even though we continue to provide maintenance service for these customers while negotiations are ongoing. While certain commercial customers require this type of contract renewal, these contracts are generally limited to government organizations, including federal, state and local entities. When a renewal of this nature has been contracted, it is often accompanied by several months of "catch-up" revenue from services performed in past periods resulting in a one-time value that is greater than the normal monthly revenue expected over the life of the remaining term.

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. 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. 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 expenses relate primarily to the development of new software products and the ongoing maintenance and enhancement of existing products. This classification consists primarily of employee payroll and related expenses, outside services related to the design, development, testing and enhancement of our solutions and, to a lesser extent, hardware equipment. Research and development expenses exclude any development costs that qualify for capitalization.

•Technology Operations. These are expenses associated with the operation of our paging networks. Expenses consist largely of site rent expenses for transmitter locations, telecommunication expenses to deliver messages over our paging networks, and payroll and related expenses for our engineering and pager repair functions. We actively pursue opportunities to consolidate transmitters and other service, rental and maintenance expenses in order to maintain an efficient network while simultaneously ensuring adequate service for our customers. We believe continued reductions in these expenses will occur for the foreseeable future as we continue to consolidate

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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. 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. We maintain a centralized marketing function, that is focused on supporting our products and vertical sales efforts by strengthening our brand, generating sales leads and facilitating the sales process. These marketing functions are accomplished through targeted email campaigns, webinars, regional and national user conferences, monthly newsletters and participation at industry trade shows. Expenses consist largely of payroll and related expenses, commissions and other costs such as travel and advertising costs.

•General and Administrative. These are expenses associated with information technology and administrative functions, including finance and accounting, human resources and executive management. This classification consists primarily of payroll and related expenses, outside service expenses, taxes, licenses and permit expenses, and facility rent expenses.

•Depreciation and Accretion. These are expenses that may be associated with one or more of the aforementioned functional categories. 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.

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.

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. 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.

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. 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. 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.

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.

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.

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.

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.

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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.

(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.

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. 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.

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. 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.

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 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.

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. 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. 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. Any inability to access or delay in accessing these funds could adversely affect our business, financial condition and results of operations.

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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). At any point in time, we maintain approximately $5.0 to $10.0 million in our operating accounts at third-party financial institutions. 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 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.

With our ongoing efforts to maximize revenue and optimize costs, we anticipate positive cash flow generation will continue in future operating periods.

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.

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.

Cash Flows Overview

In the event that net cash provided by operating activities and cash on hand are not sufficient to meet future cash requirements, we may be required to reduce planned capital expenses, reduce or eliminate our cash dividends to stockholders, not repurchase shares of our common stock under the share repurchase program, sell assets or seek additional financing. We can provide no assurance that reductions in planned capital expenses or proceeds from asset sales would be sufficient to cover shortfalls in available cash or that additional financing would be available on acceptable terms.

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).

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. Cash from operations varies depending on changes in various working capital items, including deferred revenues, accounts payable, accounts receivable, prepaid expenses and various accrued expenses.

Our operating cash results primarily from cash received from our customers, offset by cash payments we make for products and services, operating expenses and income taxes. Significant non-cash expenses include depreciation and accretion, deferred income tax expense and stock-based compensation. The cash impact from actual transaction gains and losses is reflected in the change in working capital.

For the years ended December 31, 2025 and 2024, net cash provided by operating activities remained steady at $28.9 million.

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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. For the year ended December 31, 2025, the net cash also includes proceeds from the sale of a domain name.

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.

Commitments and Contingencies

In the ordinary course of our operations, we enter into certain contractual obligations. Such obligations include data processing services, operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities.

Purchase obligations are defined as agreements to purchase goods or services that are enforceable, legally binding, non-cancelable, have a remaining term in excess of one year and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable pricing provisions; and the approximate timing of transactions. The amounts of such obligations are based on our contractual commitments, however, it is possible that we may be able to negotiate lower payments if we choose to exit these contracts before their expiration date.

Our contractual payment obligations for operating leases apply to leases for office space and transmitter locations.

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. As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

The Company evaluates contingencies on an ongoing basis and establishes loss provisions for matters in which losses are probable and the amount of loss can be reasonably estimated. 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. 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.

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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. Actual results could differ significantly from those estimates. 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.

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. Contracts which include goods or services related to our software solutions and subscriptions are generally sold with multiple promises, and therefore, will often include multiple performance obligations. Material performance obligations related to the sale of our software solutions include software licenses, professional services - projects, professional services - managed services, hardware and maintenance.

If a contract is separated into more than one performance obligation, we allocate the total transaction price to each performance obligation proportionately based on the estimated relative standalone selling price ("SSP") of the promised goods or services underlying each performance obligation. We rarely sell goods or services as readily observable standalone sales, however, if we do, the observable standalone sales are used to determine the SSP. In most cases, we must estimate the relative SSP which requires significant judgment and estimates. In instances where SSP is not directly observable, we determine the SSP using information that may include contractually stated prices, market conditions, costs, renewal contracts, list prices and other observable inputs. A discount is present if the total transaction price is less than the sum of the estimated SSPs of the goods or services promised in the contract. Discounts are generally allocated proportionately based on the relative SSP of the identified performance obligations for a given contract.

Our wireless, professional, maintenance and subscription services are generally recognized over time due to a customer's simultaneous receipt and consumption of the benefit as we perform the work. As we transfer control over time, we recognize revenue based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires significant judgment and is based on the nature of the products or services to be provided. 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. For professional services - projects, we leverage an input methodology based on the number of hours worked on a project versus the total expected hours necessary to complete the project. Revenues are recognized proportionally as hours are incurred. This is a significant area of judgment as it requires an estimate at completion ("EAC") for each contract. Our initial EAC is primarily based on prior experience also taking into consideration any specific facts and circumstances for a given contract. As projects progress, the EAC is periodically updated and reviewed to ensure the timing of revenue recognition is appropriate. The creation, maintenance and review of a project's EAC requires significant judgment to determine an appropriate number of hours over which the remaining project is expected to be completed.

Our software licenses and hardware are generally recognized at a point in time when we have transferred control to the customer. For software licenses, revenue is not recognized until the related license(s) has been made available to the customer and the customer can begin to benefit from its right to use the license(s). Our software licenses represent a right to use Spok’s Intellectual Property ("IP") as it exists at a point in time at which the license is granted. Many of our software licenses have significant standalone functionality due to their ability to process a transaction or perform a function or task, and we do not need to maintain those products, once provided to the customer, for value to exist. While the functionality of IP that we license may substantively change during the license period, customers are not contractually or practically required to update their license as a result of those changes. In most contracts, transfer of control for software licenses occurs in a short period of time after a contract has been executed and licenses are made electronically available.

Income Taxes

Deferred income tax assets and liabilities are calculated based on temporary differences between the financial statement values and the tax bases of assets and liabilities including net operating loss and tax credit carryforwards at the enacted tax rates expected to apply to taxable income when taxes are actually paid or recovered. Changes in deferred income tax

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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. 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. 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. 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. 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. 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.

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. Significant judgment is required in the determination of a triggering event given the qualitative nature of the assessment. 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 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. 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. 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.

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.