Revenue during the quarter dropped 8.69 percent to $41.44 million from $45.39 million in the previous year period. Gross margin for the quarter expanded 69 basis points over the previous year period to 83.02 percent. Total expenses were 96.67 percent of quarterly revenues, up from 87.22 percent for the same period last year. That has resulted in a contraction of 944 basis points in operating margin to 3.33 percent.

Operating income for the quarter was $1.38 million, compared with $5.80 million in the previous year period.

"We are encouraged with our performance in the first quarter of 2017 and believe that it provides a solid base for the remainder of the year,” said Vincent D. Kelly, chief executive officer. “We posted the largest first quarter software bookings result in our history and saw strong year-over-year performance in a number of other key operating measures, including average deal size, number of new logo deals, backlog levels, as well as wireless subscriber retention. We achieved these results, as we increased our investment in our business by enhancing and upgrading our product development team and tools, as well as our sales infrastructure and management. As we have previously outlined, while these investments will lower our margins over the next several years, we believe this effort will yield significant future benefits in the form of our improved, integrated communication platform, Spok Care Connect®, as well as higher future bookings levels, and ultimately margins, supported by our enhanced and upgraded sales team. Overall, we continued to operate profitably, enhance our product offerings, and operate as a debt-free company. We also executed against our capital allocation strategy, by continuing to make key strategic investments in our business while returning cash to our stockholders during the quarter in the form of dividends."

For fiscal year 2017, Spok Holdings, Inc. forecasts revenue to be in the range of $161 million to $177 million.

The company has spent $2.85 million cash to meet investing activities during the quarter as against cash outgo of $1.44 million in the last year period.

The company has spent $7.69 million cash to carry out financing activities during the quarter as against cash outgo of $7.48 million in the last year period.

Cash and cash equivalents stood at $118.95 million as on Mar. 31, 2017, up 6.28 percent or $7.03 million from $111.92 million on Mar. 31, 2016.

Working capital increases marginally
Spok Holdings, Inc. has recorded an increase in the working capital over the last year. It stood at $99.18 million as at Mar. 31, 2017, up 4.63 percent or $4.39 million from $94.79 million on Mar. 31, 2016. Current ratio was at 2.97 as on Mar. 31, 2017, down from 3.10 on Mar. 31, 2016.

Cash conversion cycle (CCC) has increased to 36 days for the quarter from 12 days for the last year period. Days sales outstanding went up to 51 days for the quarter compared with 44 days for the same period last year.

Days inventory outstanding has decreased to 12 days for the quarter compared with 24 days for the previous year period. At the same time, days payable outstanding went down to 26 days for the quarter from 56 for the same period last year.