Hi Art;
Fresh caliper seals, and freely-moving pistons, will give a short "take-up" to the pedal travel, a noticeable distance that once passed will result in a firm pedal. The spongy pedal I have found is caused by the pads bedding in to the rotor, new, turned, or used, and the anti-squeal shims Volvo was so fond of. With pads like the PBR brand I just threw the shims away. I'm not a fan of the red goop silicone stuff that I have found previous repair people have used in a vain attempt to stop squealing.
It's also why I used a five mile road test loop for all customer brake jobs. I was able to remove the spongy feeling, and of course check for any other troubles.
If one piston in the Ate caliper locks up the pedal will get spongy as it's pad wears without moving while the still functioning piston distorts the rotor over to it. That was a tough diagnosis when I first saw that one! About three millimeters of pad clearance on one side, none on the other. Pedal dropped 1/3 of the way to take that up!
Rhys