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Spok Holdings Inc (SPOK -0.71%)
Q4Â 2019 Earnings Call
Feb 27, 2020, 10:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good day and welcome to the Spok's 2019 Fourth Quarter and Year-End Investor Call. [Operator Instuctions] 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.
Michael Wallace -- Chief Operating Officer and Chief Financial Officer
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.
Vincent D. Kelly -- President and Chief Executive Officer
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, an 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 to reflect that structure. This has resulted in increased development costs and associated reductions in margins these past few years. To offset this going forward, we made a significant change in our strategy around our premise-based Spok Care Connect solutions in 2019 and the portions of both development and support have been moved offshore to take advantage of lower labor pricing, will bring an increased focus on speed in Spok Go platform with our US based developers.
For 2020, we expect approximately 20% of our R&D spend to be for our legacy solutions and approximately 80% to be on our new platform, reflecting our continued investment in our future. We've talked about this before, but we are transitioning our software business from a customized premise-based solutions to a configurable Cloud Native solution. This transition will take time, but ultimately result in a platform that is much easier to upgrade, expand, sell and service.
We also continue to remain focused on the efficient and effective operation of our wireless infrastructure and support systems. Our wireless subscribers provide the base that allows for our investment in product development as well as support for our capital allocation plan. Over time, we expect software revenue to exceed wireless revenue on a quarterly basis. However, despite that distinction, our wireless business will continue to be a significant driver in our success as an organization for many years to come. We have deeply integrated the majority of our system, we consider Paging to be a service line, as part of the Spok Go platform.
As we laid out in the past, our investment to complete the Spok Go platform and become the leader in unified clinical communications and workflow collaboration will continue to put pressure on operating margins as we support sales execution in development with our customers. As undertaking has made significant progress since 2017, we have just announced last week, the first availability of our new platform Spok Go. Our focus in 2020 is to balance the acceleration of the internal development and selling efforts for our new Spok Go platform, while maximizing sales of Spok Go and Spok Care Connect coupled with maintaining our wireless subscriber base.
As always, creating stockholder value of the long-term remains a key driver of our strategy along with our focus on all constituents including customers, employees and the communities in which we live and work. It's why we made the pivot in the first place. We believe our constituents will ultimately be rewarded as our investments and efforts create a unique and powerful clinical communication platform yielding future revenue, EBITDA and operating cash flow growth. On behalf of our entire senior management team, we appreciate the continued support that our investors have provided us in this journey.
Now turning to the 2019 fourth quarter and full year results. We were particularly pleased with the sequential growth in software bookings in the seasonally strong fourth quarter including a more than 17% sequential growth in software operations booking. Also the continued yearly improvement in our wireless trends included a reduction in paging unit erosion as well as continued slowing of wireless revenue declines. We believe these accomplishments are the direct results of the investments we have made in our sales team and infrastructure. Overall, we continue to enhance our product offerings and maintain the strength of our balance sheet. Our ability to continue to generate cash allowed us to execute against our capital allocation strategy, returning more than $16.4 million to our stockholders in 2019 in the form of dividends and share repurchases.
Mike Wallace and John LaLonde will provide details on our financial performance and development activity shortly. But before that, I want to highlight the results for 2019 fourth quarter and full year. First, continued demand for our software solutions and wireless services resulted in consolidated revenue of $160.3 million for 2019 down approximately 5.4% from the prior year. Year-over-year performance was driven in large part by a $6.1 million year-over-year reduction in wireless revenue, although at a slower than anticipated attrition rate as annual declines remain in the mid-single digit range. Software revenue in 2019 was also down approximately $3.1 million in the prior year as we focused on developing our new Cloud Native, an integrated communication platform. While we are not satisfied with software revenue levels in 2019, we did see a continued trend of very strong renewal rates on software maintenance contracts. Also, our pipeline of marketing qualified sales leads continues to grow. Our sales engineering team was also very busy last year as they performed approximately 120 customer demos, help train nearly 400 statements of work and completed more than 50 RFPs. Demand for our solutions remains strong as in North American market specifically among hospitals and other healthcare organizations where we sold solutions for smartphones communications, call center management, secure texting, clinical alerting and emergency notification to both new and existing customers.
Next wireless subscriber and revenue trends continue to improve in 2019 as we again exceeded our expectations for gross additions, net unit churn, revenue and ARPU. Noteworthy, in 2019 with 112,000 new units that were added to our subscriber base, we were particularly pleased to see many of our gross placement come from takeaways from a key competitor in this space. Our year-over-year rate of paging unit erosion was consistent with prior year levels as the net number of units lost during the year totaled 54,000, down 5.4% from the prior year. Our year-over-year rate of wireless revenue erosion was only 6.5% for 2019, a 30 basis point improvement from the prior year and a sharp reduction on the double-digit declines we saw prior to 2016. Overall, we are pleased with our operating performance in the fourth quarter and the company's substantial progress in 2019. We met or exceeded our expectations on a number of key operating measures and we achieved these results as we continue to make key strategic investments in our business. In addition to our financial performance progress was made in several other areas including product development, sales strategy and key strategic partnerships and agreements.
During the quarter we did more than 36 new figures six-figure installations, more than 30 new six-figure installations of Spok solutions for our customers. Out of those three were new logo deals. I want to highlight a couple of the new six-figure deals for you. In October we signed a deal with a large North Central based healthcare system for inpatient admissions and net patient revenue. It operates as a not-for-profit healthcare system with eight hospitals, 145 outpatient locations, nearly 5,000 physicians and more than 38,000 employees. The graduate medical education include 955 residents enrolled [Phonetic] of 105 residency and fellowship programs. This organization has been a valued Spok customer with multiple solutions for 10 years. In 2017 they switched to a competitor rather than upgrading with Spok. The competitor failed to execute on planned site migrations due to the healthcare system's complex needs. The Spok team staying close during this sensitive time was key to our renewed partnership. In October, the organization executed on a Spok Care Connect 1.9 upgrade for $412,000 and will leverage Spok for enterprise wide consolidation efforts.
Another customer. I'd like to highlight is a self funded political subdivision healthcare system in the Southeastern state does not receive tax dollars from the community. This research and teaching hospital has five locations, 747 beds and around 9,000 employees with 700 physicians on staff. This organization has been Spok customer for more than 12 years. They acquired three new hospitals between 2018 and 2019. Last year our CIO was not pleased with the competitor they were using for secure messaging, so they turned to Spok for their physician collaboration needs. She stayed close during the transition and in doing so strengthened our partnership with the clinical level. In October, the organization executed on Spok Care Connect upgrade of $402,000 while locking in a five-year deal with 1,000 Spok Mobile licenses and an expansion to our messenger solution. These are just a couple of the examples of our activity in the fourth quarter.
Finally in 2019 Spok continued to build an industry-leading reputation in the marketplace. Let me give you a brief overview of some of our accomplishments in this area. First, for the full year 2019, we added more in the 150 new accounts, primarily in the healthcare and government sectors. Additionally, during the year we announced key strategic partnerships, most notably with Amazon Web Services or AWS, for a complete cloud services infrastructure giving Spok enterprise commerce customers excellence in security, agility and breadth and depth of services with the real-time cloud-based communication solution. Also in 2019 our management were keynote speakers at numerous conferences.
Next Spok recieved recognition as the number one secured communications platform for hospitals and healthcare system by Black Book Market Research. Also, we continue to provide solutions to all of the US News & World Report, Best Adult Hospitals and all, but one in the best children's hospital. Finally, during the year, we continued to add depth and experience to the Spok management team with our new Chief Medical Officer, Dr. Matt Mesnik and Chief Information Officer, Tim Tindle. We intend to carry all this momentum into 2020 to stimulate long-term growth.
I want to have additional comments on our 2020 outlook, capital allocation strategies and governance matters in a few minutes, but first Mike Wallace, our Chief Financial Officer and Chief Operating Officer, will review the financial highlights of the quarter and John LaLonde our Chief Technology Officer will update you and provide more detail on our recent development efforts. Mike?
Michael Wallace -- Chief Operating Officer and Chief Financial Officer
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 a $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.
Rather, I want to focus this morning on four specific areas. These include revenue, operating expenses, a brief review of our balance sheet and our financial guidance for 2020. First, with respect to revenue in the fourth quarter of 2019, total revenue of $39.5 million was in line with the prior quarter and down from $43.3 million in the fourth quarter of 2018. Full year 2019 revenue of $160.3 million was down 5.4% on revenue of $169.5 million in 2018. Looking at software revenue. Total fourth quarter revenue of $17.9 million was up slightly from the revenue of $17.6 million in the prior quarter, but down from revenue of $20.2 million in the fourth quarter of 2018. This decrease in software revenue of $2.3 million on a year-over-year basis was primarily due to lower license revenue and associated equipment revenue in the quarter as a result of our software operations bookings being slightly lower and the mix of bookings being more heavily skewed to services, which has the positive impact of increasing our backlog, but does not have the immediate revenue recognition of license and equipment bookings. With that said, software revenue for the fourth quarter was supported by sustained maintenance revenue renewal rates of approximately 99%.
For the full year, we saw the same dynamics just mentioned to play out with respect to license and equipment revenue, but were positively offset by increases in services and maintenance revenues of 6.1% and 3.3% respectively on a year-over-year basis. Wireless revenue for the fourth quarter remained solid declining by only 0.9% from the prior quarter. For the full year wireless revenue was down a record low 6.5% from 2018 levels. Noteworthy, in the second half of 2019, wireless revenue erosion slowed to an historical low of 2.9%. This reflects -- this result reflected another impressive performance by our sales team to again generate significant wireless gross additions while minimizing churn and maintaining stable unit pricing.
Now turning to operating expenses. For the full year of 2019, adjusted operating expenses, excluding depreciation, amortization, accretion and goodwill impairment charge totaled $158.0 million, down from $161.9 million in the prior year. This performance primarily reflects increased efficiencies and expense reductions in general and administrative costs, and partially offset by the increased level of investment in research and development and then our Spok Go platform of 12.6% on a year-over-year basis. Depreciation, amortization and accretion decreased in both the fourth quarter and full year 2019, compared to the same periods in 2018, primarily due to lower amortization expense associated with our intangible assets.
As you may remember, due to our rebranding in 2014, we have revised the amortization period for the intangible assets associated with the Amcom acquisition, which resulted in increased amortization expense in that year. During the fourth quarter we performed our annual assessment of goodwill. Based on that assessment and given the recent decline in the market value of Spok's common stock, it was determined that the carrying value of the business, exceeded the estimated fair value of the company, resulting in an impairment. However, let me point out in our belief, the impairment does not reflect management's confidence in the future value of our business. Our outlook continues to remain strong. We believe Spok Go is set to meet a significant need in the healthcare marketplace and will create significant value for shareholders in the coming years.
For a more detailed explanation of how the estimated fair market value the company has derived, please see Note 6 in our 2019 10-K, which again we expect to file later today. Nonetheless, the assessment of goodwill resulted in an $8.8 million non-cash impairment charge in the fourth quarter. Excluding the impact of the charge, which we believe is a more appropriate way to look at our results, since 2018 did not include any change in the assessment of goodwill, the net loss and per loss were more consistent with 2018 levels.
Next our capital expenses in the fourth quarter of 2019 were approximately $0.7 million and were incurred primarily for the purchase of pagers and infrastructure to support our wireless customers. For the full year capital expenses totaled $4.8 million, down from $5.9 million in 2018, reflecting the decreased capital needs to support the Spok Go platform development. We believe that we are past the major portion of our capex requirements to support our strategy and that level should generally remain flat over time.
Finally, looking at our deferred tax assets or DTAs, we have approximately $49 million in DTAs at year-end up $2.5 million from the prior year-end level. The DTAs primarily consist of net operating losses, which will expire in the years 2025 through 2029. Based on the availability of these DTAs, we do not expect to pay a significant amount in federal income tax for the foreseeable future as these DTAs allow us to offset virtually all of our regular federal tax [Indecipherable].
And lastly with respect to our financial guidance for 2020, as it's typical with our fourth quarter earnings release, we have included an additional schedule detailing the components of our annual guidance for this year. Included in our guidance, our Spok's expectations for software and wireless revenue generation in 2020. We expect total revenue to range from $149 million to $165 million. Included in that total we expect software revenue to comprise $72 million to $80 million, consistent with 2019 levels at the low end of the range -- low end of the guidance range and a 10.9% improvement from 2019 at the high end of the range. Finally Spok expects adjusted operating expenses, excluding depreciation, amortization and accretion to range from $158 million to $167 million, capital expenses to range from $2.3 million to $6.3 million. I would remind you once again that our projections are based on current trends and that those trends are always subject to change.
With that I will turn the call over to John LaLonde who will update you on our software engineering efforts. John?
John LaLonde -- Chief Technology Officer
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, improvement [Phonetic] in 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.
Spok 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 Go to address long-standing unmet needs in patient care coordination and relieved much of the increasing burden clinical staff face today. It's also imperative that we innovate a newly -- new ways to help address clinical staff earnout [Phonetic] as well as mitigate new risks to patient safety. This new release, the Spok Go platform is a combination of close collaboration with our clinical innovation partners and literally hundreds of thousands of hours across our collective organization. We set out new features and capabilities in this third release, and more than doubled the first and second major releases of Spok Go combined. This indicates our organization that's accelerating its pace of innovation. As new customers buy into Spok Go this year and participate in Spok's clinical innovation partners program, we expect this pace to continue.
As Vince described earlier, we pursued a balanced approach to onshore-offshore resource allocation. This has been based on successful models put in place in my previous R&D leadership roles at the Tronick and GE Healthcare. Key members of our engineering leadership team have also come to Spok from these companies which as aided leveraging prior relationships with global engineering firms and achieving our long-term goals and balance quickly over the course of 2019.
Having given you the background for our development efforts, let me now take a moment to outline just a few of the new capabilities included in our latest release of the Spok Go platform. And most significant new capability is the Cloud Native on-call scheduling service. This new role-based service is both multi-site and multi-department meaning become scale from a single hospital or clinic to the largest health systems with dozens of hospitals, clinics, imaging centers and ambulatory surgical centers. The service always remains performance and is in different to the total number of schedules due to our use of AWS Elastic Compute and capabilities. Our AWS infrastructure automatically scales up computing resources where needed and reduces computing resources when the on-call system -- on-call scheduling system activity is quite [Indecipherable]. This in effect means that we can instantly increase computing horsepower and then draw down as needed with lower activity to optimize responsiveness while minimizing costs.
Hundreds of on-call schedules can be created and managed within this new service and everything can be accessed and configured through your favorite web browser. Spok provides important analytics and on-call schedules to more effectively balance clinical staff shift loads and determine in a glance the in-shifts that's not on schedule, thereby mitigating the potential for no one being designated for an on-call role. The global directory for the Spok Go platform has been extended to include share device support and paging device information. Customers have long recognized Spok's global directory as their source of truth and they readily acknowledge Spok provides more enterprise value than other enterprise directory is based on, for example, enterprise email.
Spok's global directory now in the cloud secure access and integration with apps has been made radically easier and with it new enterprise value for healthcare organizations. New clinical workflow packages have been added for labs, radiology, which are fully integrated with our desktop and mobile apps. We can now -- we can mobilize customers EHRs by routing high priority orders of any kind to care team members with configurable escalations. Speaking of mobile, we released a new 2.0 version of our Enterprise clinical communications mobile app for iOS, iPad OS and the Android. This new version of Spok Go now offers integration with our paging network infrastructure, our global search capability and an innovative activity feed concept, which is a one-stop shop for all activities from real-time lab results to group chats to pages can be organized, filtered and presented in a way tailored for each user. Finally this new version as the ability for users to see all of their on-call schedules directly within the mobile app.
FInally, as a reminder all the functionality I have discussed today is live and in production now. Additional functionality will be added over the course of 2020 in what we call feature drops, which follows best practices established at Google, Amazon, Microsoft and others to get new features into the hands of our SaaS customers more quickly and with zero downtime.
At this point, I'll turn it back to Vince for some closing comments before we open it up to your questions.
Vincent D. Kelly -- President and Chief Executive Officer
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 HIMSS '20 conference next month, ware 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 we continue our commitment to investing to address near-term opportunities and to achieve long-term organic growth. We believe these investments are critical in supporting our strategy to deliver our industry-leading clinical communication and collaboration platform and drive long-term stockholder value. However, what we believe that we need to continue investing in our future, we have completed the bulk of our investments as we began selling Spok Go platform. For that reason we are holding the low end of our 2020 guidance range for adjusted operating expenses, essentially flat to 2019 levels. As a backdrop in 2016. R&D expenses totaled approximately $13.5 million, an increase of nearly one third from prior year levels.
In 2017, R&D expenses totaled $18.7 million, an increase of nearly 40% from 2016. And in 2018 R&D expenses totaled $24.5 million, a 31% increase than 2017. And last year in 2019, R&D expenses totaled $27.5 million, a 12.6% increase from the prior year. We believe that R&D expense increases will continue to slow in 2020 in approach of more steady state level. Included in the expense that Mike outlined a few minutes ago, in 2020, we anticipate that R&D expenses will increase than 2019 level, although at a much slower pace and will be primarily offset by expense reductions in other categories.
With respect to our capital allocation strategy, our overall goal has been to achieve sustainable business growth while maximizing long term stockholder value through our multifaceted capital allocation strategy that is included dividend and share repurchase, strategic investments to improve our operating platform and infrastructure and drive long-term organic growth and potential acquisitions that could provide additional revenue streams and are accretive to earnings. For 2020, we are committed to continue paying our $0.125 per share quarterly dividend. We will continue to evaluate our capital allocation strategy on a quarterly basis and communicate our plans with you with respect to dividends, share repurchases and other uses of capital each quarter when we report our earnings.
Finally I want to touch on a few governance matters. We recently added Dr. Bobbie Byrne, CIO at Advocate Aurora Health to our Board of Directors. Dr. Byrne brings of breadth and depth of clinical and IT knowledge to our Board. And we are delighted to have her as part of our team. As the appointment of Dr. Byrne demonstrates, we are committed to having a best-in-class Board of Directors with experienced professionals who bring the Board relevant expertise. We expect to continue our efforts in this regard. Our Nominating and Governance Committee continues working with Korn Ferry and we will report to you on those results as we make more progress. We are committed to adding software and healthcare expertise to our Board while maintaining stability as we make our transition as a leader in clinical communications and collaboration solutions.
From a business configuration and strategy perspective, the Board believes we are optimally situated at the moment as a stand-alone company that has an organic growth engine in Spok Go and a source of strong cash flow and our paging subscriber base. We run the largest paging offering in the world, and integrated its operations deeply with our operations in software and continue to enhance our paging platform and user devices. While we do not comment on offers received by the company, rest assured that our Board is open to considering all strategic alternatives presented to us. While we will consider any alternatives presented to us, the Board's view that Spok is that an important inflection point, we have and continue to spend on R&D in development of Spok Go, but not yet realized significant revenue and profit from that platform. We strongly believe that our best financial results are ahead of us and we believe we have better visibility into that at any strategic partner or acquirer would have, and so we are pleased to remain independent and believe doing so is the best way to maximize shareholder value.
I also want to note that I personally and fully committed to this approach and believe strongly in our future. I'd cancel my 10b5-1 plan, I have no plans to sell any Spok stock.
At this point, I'll ask the operator to open the call for your questions. We ask that you limit your initial questions to one and a follow-up and after that we'll take additional questions as time allows. Operator?
Questions and Answers:
Operator
[Operator Instructions] We do have a question, Ryan Vardeman, Palogic.
Ryan Vardeman -- Palogic Value Management -- Analyst
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?
Vincent D. Kelly -- President and Chief Executive Officer
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.
Ryan Vardeman -- Palogic Value Management -- Analyst
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.
Vincent D. Kelly -- President and Chief Executive Officer
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 a 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?
Ryan Vardeman -- Palogic Value Management -- Analyst
I mean, I don't, yes, thank you.
Vincent D. Kelly -- President and Chief Executive Officer
Thank you, Ryan.
Operator
Okay. We have no further questions in the queue at this time.
Vincent D. Kelly -- President and Chief Executive Officer
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.
Operator
[Operator Closing Remarks]
Duration: 43 minutes
Call participants:
Michael Wallace -- Chief Operating Officer and Chief Financial Officer
Vincent D. Kelly -- President and Chief Executive Officer
John LaLonde -- Chief Technology Officer
Ryan Vardeman -- Palogic Value Management -- Analyst
