Ladies and gentlemen, good morning and welcome to Spok's 2021 First Quarter Investor Call. Today's call is being recorded. On line today we have Mr. Vince Kelly, President and Chief Executive Officer; and Mr. Mike Wallace, Chief Operating Officer and Chief Financial 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 2021 first quarter 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 related to our operations and the business environment which we compete contained in our 2021 Form 10-Q 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 past or present filings and conference calls. With that, I'll turn the call over to Vince.

Thanks Mike and good morning. Thank you everyone for joining us on our first quarter 2021 update call. As always I hope all of you your friends and families are and remain safe. Unfortunately, we've had recently lost an employee and we're down another -- we have another employee down hard right now with COVID along with his spouse. We're praying for their speedy and full recovery. In the first quarter, we saw positive indicators that our customers are recovering operationally and financially from a very challenging year. In 2020, most of our customers were essentially shut down for new business and were unavailable to work with us to install existing backlog. As a result of the pandemic primary spending focus went to patient monitoring respiratory and vital science equipment and medication administration and lab equipment including PPE. Health care, IT, and enterprise software products like ours understandably moved down on the priority list. That is starting to change. Like many companies last year Spok followed the advice of health care professionals and essentially shut down our offices and stopped all business travel. That made it very difficult for our sales teams to prospect for new business while working from home. Our customers were unable to focus on new projects or even grant us access to their facilities to install existing projects. The reality is that with a new product like Spok Go, we just can't sell effectively over Zoom. Early last year we knew this pandemic would impact our results and we took steps to preserve cash continue investing in product and R&D keep the team together by implementing across-the-board furloughs versus select RIF. We heard significant feedback from our employee base thanking us for our approach and empathizing our decisions. We are pleased to announce we are canceling…

Thank you Vince. Before I review our financial highlights first quarter of 2021, I would again encourage you to review our 2021 Form 10-Q, which we expect to file later today contain significantly more information about our business operations and financial performance than we will cover on this conference call. As Vince noted, we were encouraged by our performance in the first quarter and believe that it provides a foundation for continued momentum for the balance of 2021. The momentum that we saw over the last two quarters of 2020 has carried into 2021 and we were pleased to see several operating metrics return to levels consistent with those pre-pandemic. Coupled with the stable trends in our reoccurring revenue streams of wireless and software maintenance and the traction we are beginning to see from the Spok Go platform, we believe we are well positioned for the balance of the year. While, overall, we were encouraged by our first quarter performance, we are not satisfied with revenue levels, continue to work towards sustained levels of software revenue growth offsetting the planned attrition in the wireless portfolio. We made progress in a return to pre-pandemic operating levels in the first quarter and saw growth in year-over-year license revenue, continued low attrition of wireless revenue and continued focus on expense management, resulting in net cash provided by operating activities of $0.7 million, while continuing our investment in the Spok Go platform. This was partially offset by investing activities of $3.6 million for capital expenditures and capitalized software development costs during the period. We were able to achieve this performance, as we continue to return cash to our shareholders, as a form of quarterly dividend of $0.125 per share, or $2.7 million, while also investing in our business for the long term. Our balance…

Thanks Mike. Before we open the call to your questions, I'd like to update you on our business outlook and our strategic direction. Before I do, I'd like to briefly discuss the recent change that was made to Spok's Board of Directors. Earlier this month in support of the Board's refreshment process, Brian O'Reilly, a member of the Board of Directors informed the company that he will not stand for reelection to the Board at the company's 2021 Annual Meeting of Stockholders. Let me be clear that Brian's decision was not the result of any disagreement with the company on any matter relating to operations, policies or practices. He will remain a Director and maintain this committee memberships through the 2021 Annual Meeting. I want to take this opportunity to thank Brian for his leadership on the Board and the contributions he has made to the company. Now with respect to key goals and business outlook, let me take a few moments to outline our outlook and strategy for 2021. As we've talked about in the past about five years ago we embarked on a transformation that was a title shift in our strategic direction for health care our largest customer segment. The strategy pivot signaled a very 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. In many respects this past year was the most challenging for Spok in our history from both a management and operational perspective. Yet despite this upheaval, our mission and vision has remained unchanged. Simply put, our mission is to create beautiful software that delights our customers. Our vision is to be the strategic partner of choice…

Thank you. [Operator Instructions] And our first question comes from Ryan Vardeman with Palogic.

Thanks for taking the question. I appreciate the color that you guys gave as it relates to the ARR progress. It sounds like you're still expecting somewhere around $3 million of revenue coming from Spok Go this year. That kind of puts you close to $10 million maybe $8 million, or $9 million of ARR exiting the year on a run rate basis. Is that kind of the right way to be thinking about, how you guys are thinking about pipeline and pipeline conversion?

Hey, Ryan it's Mike. It's the right way to think about it. As I said in my comments, the litmus test here is going to be obviously the level of bookings and the timing of those bookings throughout the year that will drive the SaaS revenue. Probably, what I'm most focused on given the size and timing of those bookings once we have a full year of 2021 is really to see what the exit rate is from an ARR perspective as we exit 2021. But theoretically, yes, you're thinking about it the right way.

Okay. That would be quite a nice growth trajectory for the next two or three quarters, if you're anywhere close to that. And then you brought up in your prepared remarks that you spent around $85 million investing in the Spok Go project. Do you think that you have built a business that will give you a – that's worth more than what we spent so far and will give us a good rate of return kind of from 2015 and beyond?

We absolutely do Ryan. No question about it. That's why I've been a buyer of Spok stock the last three quarters. Absolutely.

Great. Thank you.

[Operator Instructions] Speakers at this time, we have no one else in the questioning queue.

Okay. Well, look everyone thank you for joining us this morning. Much appreciated. We look forward to speaking with you again after we release our second quarter earnings in late July. Everyone stay safe out there, and have a great day. Thank you.

Ladies and gentlemen, that concludes this morning's presentation. Thank you for your participation. You may now disconnect.