Good day and welcome to the Spok's 2019 Fourth Quarter and Year-End Investor Call. Today's call is being recorded. On line today, we have Vince Kelly, President and Chief Executive Officer; Mike Wallace, Chief Operating Officer and Chief Financial Officer; and John LaLonde, Chief Technology Officer. At this time for opening comments, I will turn the call over to Mr. Wallace. Please go ahead, sir.

Good morning. Thank you for joining us for our 2019 fourth quarter and full year investor update. Before we discuss our operating results, I want to remind everyone that today's conference call may include forward-looking statements that are subject to risks and uncertainties relating to Spok's future financial and business performance. Such statements may include estimates of revenue, expenses and income as well as other predictive statements or plans, which are dependent upon future events or conditions. These statements represent the company's estimates only on the date of this conference call and are not intended to give any assurance as to actual future results. Spok's actual results could differ materially from those anticipated in these forward-looking statements. Although, these statements are based upon assumptions that the company believes to be reasonable, they are subject to risks and uncertainties. Please review the Risk Factors section relating to our operations and business environment in which we compete contained in our 2019 Form 10-K, which we expect to file later today and related documents filed with the Securities and Exchange Commission. Please note that Spok assumes no obligation to update any forward-looking statements from past or present filings and conference calls. With that, I'll turn the call over to Vince.

Thanks, Mike, and good morning everyone. Thank you for joining us on today's call. We are encouraged by our performance in the fourth quarter of 2019 and we believe we are positioned well for sustained improvements in 2020 as we begin the market and sell our new cloud-native and integrated communication platform, Spok Go. Our performance along with the significant progress our R&D team made in 2019 on our new cloud-native platform provides us confidence as we enter the New Year. So before we get into the details of the quarter and full year, I want to underscore where we are strategically with respect to our business plan and outlook. As we enter a new decade, we believe we are poised to transform the healthcare landscape to our strategy of offering an integrated cloud-native platform for mobility, clinical learning, workflows and contact center solutions. The Spok Go platform announced last week was developed on a foundation of a single best-in-class architecture, built on a cloud-based Software-as-a-Service or SaaS delivery model. This effort has been a long time coming and we know it's time to deliver. We intend to do so. Sales and revenue will ramp up over time, but based on customer feedback, and our evaluation of the competitive environment, we believe we are on track for long-term success and value creation that will reward all our constituents. As has been the case for the last several years for us to achieve our long-term goals, we need to maintain separate engineering teams from the existing Spok Care Connect solutions and the forward development of the new platform Spok Go. We want our Spok platform developers to be unfettered from day-to-day support issues and distractions in order to make as much progress as possible, over a short timeframe. Spok Go continues…

Thanks, Vince. Before I review our financial highlights for the fourth quarter and full year of 2019, I would again encourage you to review our 2019 Form 10-K, which we expect to file later today as it contains far more information about our business operations and financial performance than we will cover on this conference call. As Vince noted, we were generally pleased with our overall operating performance for the fourth quarter and full year of 2019 and believe it positions us for sustained improvement in 2020. While we were not satisfied with revenue levels in 2019, significant progress was made in meeting our long-term business goals. Sustained levels of software bookings and continued record low attrition of wireless revenue, combined with continuously focused expense management, resulted in $11.7 million in net cash flow provided by operating activities in 2019. Spok was able to achieve this performance as we continue to return cash back to our shareholders in the form of dividends of $9.8 million and share repurchases of $6.6 million, while also investing in our business for long-term growth. Our balance sheet remains strong with a cash, cash equivalent and short-term investments balance of $77.3 million at December 31, 2019. And we continue to operate as a debt-free company. We believe this provides us a solid financial platform and are well-positioned to execute against our long-term goals in 2020 and beyond. In the interest of time today, I will not review our fourth quarter and full year 2019 income statement on a line by line basis, since much of that information is contained in our earnings release tables and SEC filings. However, to the extent that you have specific questions about our quarterly financial results, I would be glad to address them during the Q&A portion of this call.…

Thanks, Mike, and good morning everyone. I appreciate joining Vince and Mike on today’s call to give you a brief update on Spok’s recent development efforts. I’m pleased to report that earlier this month we made the third major release of our Cloud Native Spok Go platform available to our customers. We are truly excited to showcase all of the new functionality and clinical workflow automation next month in 2020 in Orlando and beginning our selling process in earnest. It will be an outstanding conference for Spok this year with an already very high level of interest from customers to see this release in person. As Vince described earlier during the call, we believe we are poised to transform the healthcare landscape through our strategy of offering a single integrated cognitive platform for mobility, clinical, alerting, scheduling workflows and contact center solutions. We have partnered closely with Amazon over the past 24 months to design the Spok Go platform utilizing the very latest IFA-compliant and industry proven AWS services. This effort has yielded a best-in-class real time system architecture within an outstanding level of performance, reliability and security. Few companies in our market segment have the means to make this level of investment required to develop true enterprise grade clinical communications and clinical workflow automation capabilities that Spok has been able to manage. It also requires the top-notch R&D team with seasoned expertise in cloud platform engineering, which we have assembled over the past two years. The Spok Go platform represents a significant leap forward in delivering innovation – innovative solutions that the market is demanding. I have met with dozens of customers and new prospects over the past 18 months, and I’m delighted to report that the feedback has frankly been a bit overwhelming regarding the suitability of Spok…

Thank you, John. Okay. With respect to our key goals and business outlook. Let me take a few moments to outline our strategy. As we’ve talked about in the past, about four years ago, we embarked upon transformation was a title shift in our strategic direction for healthcare, our largest customer segment. This strategy pivot is a five-year plan that signaled a very intangible – intentional move from offering our customers point solutions or single product solutions for call center software, alarm management and secure messaging to offering them a cloud-based single integrated clinical communication and collaboration platform called Spok Go. As we previously outlined, our decision to make this shift and focus on the Spok Go platform resulted for many reasons including customer needs, our healthcare customers were telling us they needed a more unified approach to communications across their enterprise, provide potential market opportunity as we further penetrate the multi-billion dollar healthcare IT communications market, business simplification as we’ve been offering our customers too many different products in multiple versions on several different platforms, and competitive positioning. As we concluded that no one else offers a single integrated Cloud Native platform for healthcare communications. Listening to what our customers have been telling us and as a result of our work with our innovation partners at the HIMSS20 conference next month, we’re proud and excited to showcase next-generation of our platform Spok Go. Our core foundation of clinical communication is strong. We are proud of the work our employees have done in support of this mission. We have accomplished so much together since we became Spok. We are laser focused on making Spok Go the leading clinical communication and collaboration platform inside the healthcare industry. So with that as background, and with respect to our 2020 guidance, this year…

[Operator Instructions] We do have a question, Ryan Vardeman, Palogic.

Hey, guys. Thank you for taking my questions. Congrats on continuing to maintain those legacy business lines. What are the 2020 bookings goals for the cloud platform?

We did not issue specific bookings goals for our legacy or our Spok Go platform in our current guidance. We gave guidance for revenue, but not for bookings.

Okay. I mean you – a lot of the things that you said during the call are very exciting, and it sounds like customers are continuing to look at our solution. But we’re five years into this development of this platform. We spent over $85 million on R&D over the period, $100 million in sales and marketing. Yet it doesn’t seem your any more certain as it relates to success than when we started this development spend. And when I say that I would think that you’d be excited to provide bookings, guidance goals, targets aspirations and to help quantify the market opportunity that you see for the Next Gen platform, and trying to get some of this for the last several years, I thought today was going to be the day that you were going to unveil some of these metrics. But just like to understand kind of when, how we can start seeing in the numbers this confidence that you said that you’ve got? Thanks.

Yes. Ryan. Thank you for your question and for your support and your patience over the years. I totally get your frustration. I totally appreciate your question. And your first for knowledge with respect to what our bookings are going to be on this new platform. We were behind in delivering this platform. We didn’t deliver when we thought we would deliver. We thought we would have higher bookings in 2019 as a result of the platform, we actually hit our legacy, software bookings platform goals. We were short because of the new platform wasn’t out there and that shortage resulted in us missing plan. So we’re a little bit gun shy in terms of actually putting the numbers out there. I can tell you that I’ve never been more excited about the future of this company than I am right now. I looked at a very large pipeline list for Spok Go yesterday that our sales leadership showed to our Board of Directors. We have a ton of meetings set up at HIMSS to demonstrate this platform. We’ve got great conversations going on right now with additional clinical innovation partners. We think this thing is going to be a big game changer for this company. We said for years we were making this investment and we hope to be the leader in clinical communications and collaborations as a result of it, we’re meeting with Amazon in two weeks, we’re meeting with some of the big EHRs. We have a huge customer interest in this thing, and I appreciate that you like to actually see projections and see numbers with respect to what we think will sell these budget cycles that these large healthcare institutions have oftentimes last one year. Now having said that, we expect significant bookings in 2020 on the new platform. Majority of those bookings, however, will be in the second half of the year. And as we get more visibility and as we get those actual results under our belt we’ll report to you and we’ll see what we can do about truing up the forward guidance with respect to bookings. We traditionally never given bookings guidance. And so that’s something that we need to think about. But I appreciate the question. And I just want you to know from me, I expect that this company is going to be successful. And as soon as we can get some of these bookings and get some of these new clinical innovation partners under our belt, we’ll see what we can do about signaling that to the market. Fair enough?

I mean, I don’t, yes, thank you.

Thank you, Ryan.

Okay. We have no further questions in the queue at this time.

Okay. Good luck to everyone. Thank you for joining us this morning. We look forward to speaking with you again next quarter after we release our results in the end of April, roughly. Have a great day.

Thank you, ladies and gentlemen. This concludes today’s teleconference. You may now disconnect.