SPOK Stock Hovering Near Record Levels
Stocks are, admittedly, overvalued by a number of metrics, and economic data are indicating that the economy is stalling. Instead of running for the exits, investors simply need to make sure they’re seeking out quality passive income stocks that are reporting strong financial results and that have a strong balance sheet, robust outlook, reliable dividend, and stock that is outpacing the broader market.
It’s a tough order. But, one great technology stock that fits that bill perfectly is Spok Holdings Inc (NASDAQ:SPOK). The company has reported another quarterly earnings beat, raised its 2025 financial outlook, gotten its debt down to zero, and has paid a quarterly dividend for more than 20 years, plus SPOK stock recently hit a record high. What’s not to love?
About Spok Holdings Inc
Through its subsidiary Spok Inc., the company provides health-care communications services to hospitals in the U.S., Canada, Europe, Australia, and the Middle East. (Source: “Investor Presentation,” Spok Holdings Inc, August 5, 2025.)
And by communications services, it means pagers. Spok Inc. is the largest wireless paging carrier in the U.S., with more than 694,000 units in service. It has an enormous customer base and a strong relationship with leading health-care providers.
This includes nine of the top 10 U.S. News & World Report’s children’s hospitals and 18 of the top 20 adult hospitals, which are Spok customers with an average tenure of 26 years. More broadly, more than 2,200 hospitals use Spok’s technology.
Its customer base includes more than hospitals, though health-care accounts for 85% of the company’s revenue. Government, blue-chip, and “other” account for the remaining 15%. Spok’s focus is on health care though. In 2012, this sector accounted for 61% of its revenue.
Speaking of which, Spok has stable recurring software maintenance and wireless segment revenue. More than 80% of the company’s revenue is recurring thanks to maintenance revenue from contact center and wireless paging revenue.
What does that look like?
In 2024, Spok reported total revenue of $137.7 million; of that, $110.7 came from recurring revenue.
In an age of smartphones and artificial Intelligence (AI), why do hospitals still use pagers?
They are actually the safest, most reliable way for hospitals and doctors to communicate.
Pagers only need to be charged once every week or two, which means they’re less likely to lose battery power and they don’t need to be charged all the time, like a cellphone.
Pagers are also more secure than cellphones. It’s easy for confidential information sent over a text to be compromised or stolen. Pagers only send numeric messages or basic text messages, so it’s impossible for confidential information to fall into the wrong hands, something that is common with cellphones.
Another Strong Quarter & Earnings Beat
SPOK shareholders are getting used to strong financial results. For the second quarter ended June 30, 2025, Spok Holdings Inc announced that total revenue increased five percent to $35.6 million. Of that, wireless revenue inched up 0.8% to $18.4 million while software revenue climbed 10.0% to $17.2 million. (Source: “Spok Reports Second Quarter 2025 Results,” Spok Holdings Inc, July 30, 2025.)
During the quarter, the company’s software operations bookings included 23 six-figure customer contracts and one seven-figure customer contract, up both on a sequential and annual basis. At the end of the second quarter, software backlog totaled $65.2 million, up nearly 19% from the prior year.
Spok Holdings’ net income jumped 33% to $4.5 million, or $0.22 per share. Wall Street was looking for earnings of $0.18 per share.
The company reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $7.5 million, up six percent on an annual basis.
Spok ended the quarter with cash equivalents of $20.2 million, and it remains debt-free.
Commenting on the strong first-quarter results, Vincent D. Kelly, the company’s chief executive officer, said, “Based on our performance in the first half of 2025, and the numerous financial and operational milestones we achieved during the first six months, we are increasing our full year 2025 guidance estimates for revenue and adjusted EBITDA.”
Spok Holdings Inc Raises 2025 Guidance
At the midpoint of the revised guidance range, Spok Holdings Inc’s management expects 2025 software revenue to grow 6.4% at the midpoint, with total consolidated revenue growth to be partially offset by a slight decline in wireless revenue.
Management also anticipates the midpoint of its adjusted EBITDA guidance will be up from last year, with growth potential at the high end of the guidance range of more than 11%.
This includes:
- Total 2025 revenue in the range of $138.0 million to $143.5 million, up from prior guidance of $134.0 million to $142 million
- Adjusted EBITDA in the range of $28.56 million to $32.5 million, up from previous guidance of $27.5 million to $32.5 million
Quarterly Dividend of $0.3125/Share Declared
Spok Holdings Inc has a rock-solid balance sheet, which also includes significant cash flow. Since 2004, the company has generated over $1.0 billion in cumulative cash flow. This helps it provide investors with a reliable, high-yield dividend.
In 2023, SPOK stock returned $25.6 million to shareholders in the form of dividends and $26.4 million in 2024. It has returned over $700.0 million since 2004. In 2025, Spok Holdings anticipates total capital return of more than $27.0 million.
In the second quarter of 2025, Spok Holdings declared a dividend payout of $0.3125 per share, or $1.25 on an annual basis, for a current yield of 7.2%.
SPOK Stock Hits Record High
The odds of a recession have increased as the economy stalls. This is, of course, bad news for a lot of companies and their bottom lines.
Fortunately for Spok, it has an enormous customer base and strong relationships with leading health-care providers that also provide it with stable recurring wireless and software maintenance revenue with opportunities to grow total revenue.
This should help continue to support and juice SPOK stock.
SPOK popped in early May after the company reported strong first-quarter results. The stock jumped again in late July after reporting strong second-quarter results.
It actually hit a new record high of $19.31 per share on July 31, continuing to hover near that level. As of September 8, SPOK stock is trading up:
- 14% year to date
- 27.8% year over year
The outlook for the stock remains solid, too, with Wall Street analysts providing a 12-month share price target of $21.00. This points to potential upside of approximately 23%.
While SPOK is down five percent over the last five trading days, it’s important to remember that this has nothing to do with the company, rather it’s the state of the U.S. economy.
The stock has a history of bouncing back from investor overreaction. It shouldn’t take too long for investors to look under the hood and remember that, in spite of recessionary fears, Spok Holdings remains a great company.
The Lowdown on Spok Holdings Inc
Spok Holdings Inc has a strong foothold in the health information services industry, a strong balance sheet, and zero debt. The company raised its full-year guidance, and it continues to execute on generating cash flow and returning capital to stockholders.
Additional strong financial results should help energize SPOK stock and allow it to continue to provide investors with a reliable, high-yield distribution.