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Revenue, Deferred Revenue and Prepaid Commissions
 6 Months Ended
Jun. 30, 2025
Revenue from Contract with Customer [Abstract]  
Revenue, Deferred Revenue and Prepaid Commissions REVENUE, DEFERRED REVENUE AND PREPAID COMMISSIONS
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. Our core offering includes subscriptions to one-way or two-way messaging services for a periodic (monthly, quarterly, semiannual, or annual) service fee. This 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. A subscriber to one-way messaging services may select coverage on a local, regional or nationwide basis to best meet their messaging needs. Two-way messaging is generally offered on a nationwide basis. See "Item 1. Business,” in the 2024 Annual Report for more details.
Software Revenue
Software revenue consists primarily of license revenues, including revenues 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 maintenance and subscription revenue that is generated from the ongoing support of our perpetual and term software license arrangements, typically contracted for a period of between one and three years.
Revenue Recognition
Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
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 the 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.
Our wireless, professional services, and 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 and subscription, and professional services - managed 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.
The following table presents our revenues disaggregated by revenue type:
For the Three Months Ended June 30,
For the Six Months Ended June 30,
(Dollars in thousands)2025202420252024
Revenue:
Paging revenue$17,192 $17,633 $34,799 $35,603 
Product and other revenue1,248 664 2,115 1,289 
Wireless revenue$18,440 $18,297 $36,914 $36,892 
License$2,394 $1,697 $5,025 $4,323 
Professional services - projects3,831 3,682 8,302 7,243 
Professional services - managed services1,520 604 2,835 1,068 
Hardware376 334 697 718 
Maintenance and subscription
9,125 9,368 18,207 18,647 
Software revenue$17,246 $15,685 $35,066 $31,999 
Total revenue$35,686 $33,982 $71,980 $68,891 
The Company is currently structured as a single operating (and reportable) segment, a clinical communication and collaboration business. Sales are assigned to subsidiaries based on the geographic location of the customer at the signing of a contract. The United States was the only country that accounted for more than 10% of the Company’s total revenue for the three and six months ended June 30, 2025, and 2024. Revenue generated in the United States and internationally consisted of the following for the periods stated:
For the Three Months Ended June 30,For the Six Months Ended June 30,
(Dollars in thousands)2025202420252024
United States$35,104 $33,302 $70,667 $67,444 
International582 680 1,313 1,447 
Total revenue$35,686 $33,982 $71,980 $68,891 
Deferred Revenue
Our deferred revenue represents payments made by, or due from, customers in advance of our performance. Deferred revenue that is expected to be recognized as revenue during the next 12-month period is recorded in deferred revenue, and the remaining portion is recorded within other non-current liabilities in the Condensed Consolidated Balance Sheets.
Changes in the balance of total deferred revenue during the six months ended June 30, 2025, are as follows:
(Dollars in thousands)December 31, 2024AdditionsRevenue RecognizedJune 30, 2025
Deferred Revenue$28,939 $35,527 $(35,004)$29,462 
During the six months ended June 30, 2025, the Company recognized $18.9 million related to amounts deferred as of December 31, 2024.
Prepaid Commissions
Our prepaid commissions represent payments made to employees in advance of our performance on the related underlying contracts. These costs have been incurred directly in relation to obtaining a contract. As such, these costs are amortized over the estimated period of benefit. Changes in the balance of total prepaid commissions during the six months ended June 30, 2025 are as follows:
(Dollars in thousands)December 31, 2024AdditionsCommissions RecognizedJune 30, 2025
Prepaid Commissions$3,322 $2,407 $(1,935)$3,794 
Prepaid commissions are included within prepaid expenses in the Condensed Consolidated Balance Sheets and commissions expense is included within selling and marketing in the Condensed Consolidated Statements of Operations.
Remaining Performance Obligations
The balance of consideration allocated to remaining performance obligations at June 30, 2025 was $65.2 million, which excludes $10.1 million of additional transaction value that was deemed cancellable by the customer without significant penalty. We expect to recognize approximately $38.1 million of our remaining performance obligations over the next 12 months, with the remaining balance recognized thereafter.