Release Date: March 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Surgepays Inc (SURG, Financial) has positioned itself for significant revenue acceleration with a clear path to sustainable, positive cash flow in the next 12 months.
- The company has built a retail distribution network of nearly 9,000 convenience and community stores nationwide.
- Surgepays Inc (SURG) has launched LinkUp Mobile nationwide, with growth expected to accelerate.
- The partnership with AT&T allows Surgepays Inc (SURG) to provide wireless infrastructure and services to other companies, creating a new revenue stream.
- The point of sale software platform saw over 300% revenue growth from Q1 to Q4 in 2024, enhancing the company's retail distribution capabilities.
Negative Points
- Revenues decreased by 56% in 2024 compared to 2023, primarily due to the shutdown of the ACP federal funding.
- The company reported a gross loss of $14.3 million in 2024, compared to a $35.6 million gross profit in 2023.
- SG&A expenses increased by 57% year over year, driven by non-cash stock compensation and additional contractor and consultant fees.
- The loss from operations was $41.8 million in 2024, compared to an $18.9 million profit in 2023.
- Cash, cash equivalents, and investment balances decreased to $12.8 million at the end of 2024 from $23.7 million at the end of the third quarter.
Q & A Highlights
Q: Can you provide details on the SIM card orders and their role in subscriber conversion?
A: Kevin Cox, CEO, explained that historically, activation depended on physical SIM cards, but now they have added e-SIM capabilities, allowing newer phones to connect directly to the network without physical SIMs. SIM cards need to be present in stores for activation, and they have been distributing them to meet high demand. The SIM orders reflect the expected gross additions for LinkUp Mobile across three channels.
Q: Is the $200 million revenue projection for the next 12 months starting from Q2 2025?
A: Kevin Cox, CEO, clarified that the $200 million revenue projection is for the 12 months starting April 1, 2025, marking the full launch of their AT&T network integration.
Q: What are the economics and margin profiles of the SIM cards?
A: Kevin Cox, CEO, stated that the blended average margin for LinkUp Mobile is similar to the ACP, ranging from $8 to $15 depending on the plan. Lifeline margins vary by state, and the wholesale MVNE aims for $1 to $2 per subscriber per month. The top-up platform contributes to the overall revenue mix.
Q: How is the revenue target for the next 12 months composed?
A: Kevin Cox, CEO, mentioned that over 50% of the revenue will come from the wireless segment, primarily from LinkUp Mobile prepaid and Lifeline. The wholesale side will contribute 13%, and the point-of-sale platform transactions will account for 25-26%.
Q: What is the strategy for the 280,000 customers from ACP, and how are you targeting them?
A: Kevin Cox, CEO, noted that about one-third of the ACP customers were converted to Lifeline. They are no longer supporting the rest but will target them for LinkUp Mobile. The focus is on states with higher margins for Lifeline to maximize returns.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
