SurgePays Reports First Quarter 2025 Financial Results
- Secured $7 million in financing to accelerate growth initiatives
- Projected revenue of over $200 million for next 12 months starting April 1, 2025
- Successful AT&T integration and nationwide launch as MVNO/MVNE
- Strong demand with 250,000 SIM cards shipped and 290,000 in inventory
- Rapid sell-out of 2,600 'Phone in a Box' smartphones in under 30 days
- Pipeline expansion with 3 MVNOs integrated and 2 more onboarding
- Expected positive operating cash flow before end of 2025
- 15% interest rate on new convertible note financing
- Potential dilution from convertible note with $4 per share conversion price
- Still transitioning from federal ACP program conclusion in 2024
- Current quarter results similar to Q4 2024 with no significant growth
Insights
SurgePays completes AT&T integration and secures $7M financing, targeting $200M+ revenue with expansion from MVNO/MVNE capabilities despite flat Q1 results.
The first quarter results for SurgePays show a company at an inflection point. While Q1 2025 financial performance was essentially flat compared to Q4 2024, the company has completed several strategic initiatives that position it for significant growth. The most notable achievement is the completed AT&T network integration, transforming SurgePays from a mere reseller to a direct carrier partner with both MVNO (Mobile Virtual Network Operator) and MVNE (Mobile Virtual Network Enabler) capabilities.
The company has already shipped over 250,000 SIM cards to customers and retail partners, with an additional 290,000 in inventory and 250,000 more expected by June. This aggressive inventory buildup signals strong anticipated demand for their wireless services. Their "Phone in a Box" initiative sold out 2,600 units in under 30 days, demonstrating market receptivity to their retail offerings.
From a financial perspective, the company secured a $7 million senior secured convertible note with a 15% interest rate and 24-month maturity. While this financing provides necessary capital for expansion, the high interest rate and conversion features (fixed at $4 per share) suggest the company is paying a premium for growth capital. This financing includes 700,000 warrants at a $6 exercise price, creating potential future dilution if exercised.
The company is projecting over $200 million in revenue for the 12 months beginning April 1, 2025, with positive operating cash flow expected before year-end. This represents a major increase from current levels and signals management's confidence in their growth strategy. The transition from the federally funded ACP program that ended in 2024 appears to have been managed effectively, with new growth drivers now in place.
SurgePays' dual focus on both direct retail customers and wholesale MVNE relationships creates multiple revenue streams and could lead to margin expansion as these platforms scale. The company's MVNE pipeline has expanded with 3 MVNOs fully integrated and 2 more onboarding, suggesting growing momentum in this higher-margin business segment.
AT&T Integration Complete; Nationwide Launch Positions Company for Most Aggressive Growth Phase to Date
Company Ships Over 250,000 SIM Cards and Secures
Brian Cox, Chairman and CEO, commented:
"The investments we've made in our team, technology, distribution, and strategic partnerships have set the stage for the most significant growth phase in SurgePays' history. With our AT&T integration now complete, we've launched nationwide across our wireless ecosystem as both a Mobile Virtual Network Operator (MVNO) and Enabler (MVNE). To accelerate this expansion, we recently closed a
Operational Highlights
- Nationwide launch complete on the AT&T network, with over 250,000 SIM cards shipped to customers and retail partners. An additional 290,000 SIMs are in inventory, with another 250,000 expected by June to meet increasing demand.
- Finalized MVNO integration and full network cutover on April 1, including subscriber migrations and full validation of provisioning, billing, and API systems by AT&T.
- MVNE pipeline expanded, with 3 MVNOs fully integrated and 2 more in the onboarding process.
- "Phone in a Box" launch exceeded expectations, selling out of 2,600 ready-to-retail smartphones in under 30 days.
- Secured
$7 million - Derron Winfrey promoted to President, Sales, and Operations, overseeing growth of LinkUp Mobile, prepaid top-ups, Lifeline programs, and ClearLine.
First Quarter 2025 Financial Results
The first quarter results tracked closely with Q4 2024 and were in line with expectations. The Company continues to transition from the federally funded ACP era, which concluded in 2024. Investments made in the first quarter — including the AT&T integration, MVNE platform development, and expansion of the POS software network — have laid the foundation for our goal of a return to growth and profitability in 2025.
Cash, cash equivalents and investments balances as of March 31, 2025, were
2025 Financial Guidance:
With the nationwide launch of LinkUp Mobile and a growing pipeline of MVNE partnerships, SurgePays expects to surpass
This guidance is based solely on the monetization of core MVNO and POS platforms already deployed. As these platforms scale, both through direct customer acquisition and wholesale MVNE relationships, the Company anticipates significant revenue growth as well as margin expansion.
First Quarter 2025 Financial Results Conference Call:
SurgePays management will host a webcast today at 5 p.m. ET / 2 p.m. PT to discuss these results.
The live webcast of the call can be accessed on the Company's investor relations website at ir.surgepays.com, or by registering at the following link: SurgePays First Quarter Earnings Conference Call.
Telephone access:
-
- International: 973-528-0016
- Participant Access Code: 877643
A telephone replay will be available approximately one hour following completion of the call until May 27, 2025.
Replay: 877-481-4010 (
Replay Passcode: 52439
About SurgePays, Inc.
SurgePays, Inc. is a wireless and fintech company focused on delivering mobile connectivity and financial services to underserved communities. As both a mobile virtual network operator (MVNO) and mobile virtual network enabler (MVNE), SurgePays operates its own wireless brand while also providing back-end infrastructure, including provisioning and billing, to other wireless providers. The Company's proprietary point-of-sale platform is used nationwide in thousands of retail locations, enabling SIM activations, top-ups, and digital financial services. SurgePays is built to scale and uniquely positioned to grow across both retail and wholesale wireless channels. Visit www.SurgePays.com for more information.
Cautionary Note Regarding Forward-Looking Statements
This press release includes express or implied statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Forward-looking statements involve substantial risks and uncertainties and generally relate to future events or our future financial or operating performance. These statements may include projections, guidance, or other estimates regarding revenue, cash flow, business growth, market expansion, or customer acquisition. In some cases, you can identify forward-looking statements by the following words: "may," "will," "could," "would," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "project," "potential," "continue," "ongoing," "attempting," or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.
Although we believe the expectations reflected in these forward-looking statements, such as regarding our revenue, margins, expectations for customer demand, and profitability potential are reasonable, these statements relate to future events or our future operational or financial performance and involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control, including, without limitation, the assumption that the Company will be able to obtain high-margin recurring revenues, statements about our future financial performance, including our revenue, cash flows, costs of revenue and operating expenses; our anticipated growth; and our predictions about our industry and customer demand. These include, but are not limited to, our ability to scale our prepaid wireless business, transition ACP subscribers to Lifeline, maintain our MVNE partnerships, and achieve financial targets. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission ("SEC"), including in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The forward-looking statements in this press release speak only as of the date on which the statements are made. We undertake no obligation to update, and expressly disclaim the obligation to update, any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.
SurgePays, Inc. and Subsidiaries | ||||||||
March 31, 2025 | December 31, 2024 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 5,397,770 | $ | 11,790,389 | ||||
Restricted cash - held in escrow | - | 1,000,000 | ||||||
Accounts receivable - net | 2,486,889 | 3,000,209 | ||||||
Inventory | 1,781,365 | 1,781,365 | ||||||
Prepaids and other | 184,596 | 298,360 | ||||||
Total Current Assets | 9,850,620 | 17,870,323 | ||||||
Property and equipment - net | 523,556 | 591,088 | ||||||
Other Assets | ||||||||
Note receivable | 176,851 | 176,851 | ||||||
Intangibles - net | 1,309,510 | 1,472,962 | ||||||
Goodwill | 3,300,000 | 3,300,000 | ||||||
Operating lease - right of use asset - net | 503,502 | 564,781 | ||||||
Total Other Assets | 5,289,863 | 5,514,594 | ||||||
Total Assets | $ | 15,664,039 | $ | 23,976,005 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued expenses | $ | 3,760,820 | $ | 3,929,195 | ||||
Accounts payable and accrued expenses - related party | - | 192,845 | ||||||
Operating lease liability | 248,069 | 248,069 | ||||||
Note payable - related party | 1,731,366 | 1,689,367 | ||||||
Total Current Liabilities | 5,740,255 | 6,059,476 | ||||||
Long Term Liabilities | ||||||||
Note payable - related party | 1,416,513 | 1,866,288 | ||||||
Notes payable - SBA government | 466,627 | 469,396 | ||||||
Operating lease liability | 259,205 | 319,232 | ||||||
Total Long Term Liabilities | 2,142,345 | 2,654,916 | ||||||
Total Liabilities | 7,882,600 | 8,714,392 | ||||||
Stockholders' Equity | ||||||||
Common stock, | 20,435 | 20,435 | ||||||
Additional paid-in capital | 76,997,997 | 76,842,878 | ||||||
Treasury stock - at cost (362,620 and 0 shares, respectively) | (631,967) | (631,967) | ||||||
Accumulated deficit | (68,550,511) | (60,915,427) | ||||||
Stockholders' equity | 7,835,954 | 15,315,919 | ||||||
Non-controlling interest | (54,515) | (54,306) | ||||||
Total Stockholders' Equity | 7,781,439 | 15,261,613 | ||||||
Total Liabilities and Stockholders' Equity | $ | 15,664,039 | $ | 23,976,005 | ||||
Consolidated Statements of Operations | ||||||||
2025 | 2024 | |||||||
For the Three Months Ended March 31, | ||||||||
2025 | 2024 | |||||||
Revenues | $ | 10,577,429 | $ | 31,429,135 | ||||
Costs and expenses | ||||||||
Cost of revenues | 13,519,775 | 23,246,468 | ||||||
General and administrative expenses | 4,637,556 | 6,430,806 | ||||||
Total costs and expenses | 18,157,331 | 29,677,274 | ||||||
Income (loss) from operations | (7,579,902) | 1,751,861 | ||||||
Other income (expense) | ||||||||
Interest expense | (119,434) | (132,583) | ||||||
Interest income | 56,903 | - | ||||||
Other income | 7,140 | - | ||||||
Gain on investment in CenterCom | - | 16,153 | ||||||
Total other income (expense) - net | (55,391) | (116,430) | ||||||
Net income (loss) before provision for income taxes | (7,635,293) | 1,635,431 | ||||||
Provision for income tax (expense) | - | (423,000) | ||||||
Net income (loss) including non-controlling interest | (7,635,293) | 1,212,431 | ||||||
Non-controlling interest | (209) | (12,164) | ||||||
Net income (loss) available to common stockholders | $ | (7,635,084) | $ | 1,224,595 | ||||
Earnings per share - attributable to common stockholders | ||||||||
Basic | $ | (0.38) | $ | 0.07 | ||||
Diluted | $ | (0.38) | $ | 0.07 | ||||
Weighted average number of shares outstanding - attributable to common | ||||||||
Basic | 20,068,929 | 17,693,283 | ||||||
Diluted | 20,068,929 | 18,678,136 | ||||||
Consolidated Statements of Cash Flows | ||||||||
2025 | 2024 | |||||||
For the Three Months Ended March 31, | ||||||||
2025 | 2024 | |||||||
Operating activities | ||||||||
Net income (loss) - including non-controlling interest | $ | (7,635,293) | $ | 1,212,431 | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) | ||||||||
Depreciation and amortization | 249,574 | 233,760 | ||||||
Amortization of right-of-use assets | 61,279 | 23,363 | ||||||
Amortization of internal use software development costs | - | 55,707 | ||||||
Stock issued for services | - | 411,740 | ||||||
Recognition of stock based compensation - unvested shares - related parties | 155,119 | 1,497,417 | ||||||
Recognition of share based compensation - options - related party | - | 6,196 | ||||||
Interest expense adjustment - SBA loans | - | 19,750 | ||||||
Right-of-use asset lease payment adjustment true up | - | (46,338) | ||||||
Gain on equity method investment - CenterCom | - | (16,153) | ||||||
Changes in operating assets and liabilities | ||||||||
(Increase) decrease in | ||||||||
Accounts receivable | 513,320 | 1,264,196 | ||||||
Inventory | - | 1,702,855 | ||||||
Prepaids and other | 113,764 | (337,975) | ||||||
Deferred income taxes - net | - | 293,000 | ||||||
Increase (decrease) in | ||||||||
Accounts payable and accrued expenses | (168,375) | (2,433,059) | ||||||
Accounts payable and accrued expenses - related party | (192,845) | 15,156 | ||||||
Accrued income taxes payable | - | 130,000 | ||||||
Deferred revenue | - | (20,000) | ||||||
Operating lease liability | (60,027) | 28,012 | ||||||
Net cash provided by (used in) operating activities | (6,963,484) | 4,040,058 | ||||||
Investing activities | ||||||||
Purchase of leasehold improvements | (18,590) | - | ||||||
Net cash used in investing activities | (18,590) | - | ||||||
Financing activities | ||||||||
Proceeds from stock issued for cash | - | 17,249,994 | ||||||
Proceeds from exercise of common stock warrants | - | 8,799,257 | ||||||
Cash paid as direct offering costs | - | (1,395,000) | ||||||
Repayments of loans - related party | (407,776) | (368,421) | ||||||
Repayments on notes payable - SBA government | (2,769) | (2,870) | ||||||
Net cash provided (used in) by financing activities | (410,545) | 24,282,960 | ||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | (7,392,619) | 28,323,018 | ||||||
Cash, cash equivalents and restricted cash - beginning of period | 12,790,389 | 14,622,060 | ||||||
Cash, cash equivalents and restricted cash - end of period | $ | 5,397,770 | $ | 42,945,078 | ||||
Supplemental disclosure of cash flow information | ||||||||
Cash paid for interest | $ | 90,860 | $ | 129,003 | ||||
Cash paid for income tax | $ | - | $ | - | ||||
Supplemental disclosure of non-cash investing and financing activities | ||||||||
Reclassification of accrued interest - related party to note payable - related party | $ | - | $ | 498,991 | ||||
Exercise of warrants - cashless | $ | - | $ | 41 | ||||
Goodwill (ClearLine Mobile, Inc.) | $ | - | $ | 2,500,000 | ||||
Right-of-use asset obtained in exchange for new operating lease liability | $ | - | $ | 98,638 | ||||
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SOURCE SurgePays
FAQ
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