SurgePays Reports First Quarter 2025 Financial Results
AT&T Integration Complete; Nationwide Launch Positions Company for Most Aggressive Growth Phase to Date
Company Ships Over 250,000 SIM Cards and Secures $6 Million in Cash to Accelerate Expansion
BARTLETT, Tenn., May 13, 2025 /PRNewswire/ -- SurgePays, Inc. (Nasdaq: SURG) ("SurgePays" or the "Company"), a wireless and point-of-sale technology company, today announced its financial results for the first quarter ended March 31, 2025. Following the successful nationwide launch and full integration with AT&T, the Company is reaffirming its outlook of generating over $200 million in revenue for the twelve months beginning April 1, 2025, with positive operating cash flow expected before year-end.
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 $7 million financing, including $6 million in cash, with one of our largest shareholders. This transition from a reseller model to a direct carrier partner is a transformative milestone, positioning us to scale rapidly and profitably in both retail and wholesale."
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 in financing from a large institutional shareholder
to accelerate growth initiatives.
-- 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 $5.4 million. Subsequent to the end of the quarter, the Company closed on a $7 million senior secured convertible note (the "Note") with interest rate of 15% per annum that matures 24-months from the date of closing. Amortization of the Note begins at month eight with a prepayment option in excess of amortization in whole or in part at any time with five days' advance notice at a 2% premium to the principal amount plus accrued interest. The Note has a fixed conversion price of $4 per share beginning at month eight from the date of issuance, subject to monthly conversion limits. Included in the Note is a dilution offset clause in which the investor will exchange 333,333 shares of the Company's common stock previously held by the investor for $999,999 of principal at $3 per share. Additionally, the Company will issue 700,000 5-year warrants at an exercise price of $6.00 per share.
2025 Financial Guidance:
With the nationwide launch of LinkUp Mobile and a growing pipeline of MVNE partnerships, SurgePays expects to surpass $200 million in revenue over the next 12 months beginning April 1, 2025. The Company also anticipates generating positive operating cash flow before the end of the year, marking a pivotal shift toward sustained profitability and scalable growth.
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:
- U.S.: 877-545-0523
- 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 (U.S.) or 919-882-2331 (Intl.)
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
Consolidated Balance Sheets
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, $0.001 par value, 500,000,000 shares authorized 20,431,549 20,435 20,435
shares issued and 20,068,929 shares outstanding, respectively, at March 31,
2025 and December 31, 2024
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
(Unaudited)
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
stockholders
Basic 20,068,929 17,693,283
Diluted 20,068,929 18,678,136
Consolidated Statements of Cash Flows
(Unaudited)
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)
operations
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
