SurgePays, Inc. Q1 FY2025 earnings call

• Completed a strategic financing to accelerate growth, with Cable Car investing $6 million.
• Launched a multi-year partnership with AT&T, completing integration by April 1, 2025, and shipping over 210,000 SIM cards with more inventory arriving by May.
• Wireless business growing across MVNO (LinkUp Mobile, Torch Wireless) and MVNE wholesale platform, with three MVNOs onboarded and two more in integration pipeline.
• Launched the Phone in a Box product at Hackney shows, which sold out quickly, with each store selling it becoming an activation point.
• Promoted Derron Winfrey to President of Sales and Operations to drive revenue growth and scale the business.

For the first quarter of 2025, SurgePays reported revenue of $10.6 million, down from $31.4 million in the same period of 2024. Platform service revenue grew to $8.3 million in Q1 2025 from $2.5 million in Q1 2024. Gross profit was a loss of $2.9 million in Q1 2025 compared to $8.2 million gross profit in Q1 2024. SG&A expenses decreased by 28.6% year-over-year to $4.4 million in Q1 2025. Loss from operations was $7.6 million in Q1 2025 versus $1.8 million operating profit in Q1 2024. Cash, cash equivalents, and investments were $5.4 million as of March 31, 2025, down from $11.8 million at the end of 2024.

• Targeting $200 million in revenue over the 12-month period ending April 1, 2025, and expecting to be operating cash flow positive by the end of 2025.
• MVNE revenues expected to start flowing in Q2 as MVNOs ramp up and replenish with SurgePays SIMs.
• Aim to reach 100,000 locations operating on the SurgePays platform in the near term.
• Expect to have about 800,000 SIM cards distributed or in inventory by June.

• Forward-looking statements are subject to risks and uncertainties as defined in the Private Securities Litigation Reform Act of 1995, with actual results potentially differing materially from forward-looking statements due to various factors like market conditions and regulatory changes.

Q: On the MVNE opportunity, when can revenues start flowing in?

A: Revenues should start in Q2 as MVNOs ramp up and replenish with SurgePays SIMs.

Q: How are SIM cards distributed among subscribers, retail network, and MVNEs?

A: SIM cards are triaged across all facets, with inventory to ensure replenishment for sales, distributors, and wholesale partners.

Q: Concerns about convenience store owners and economic outlook?

A: Communities served are less affected by macroeconomics, and tough times enhance available market and revenue opportunities.

Q: Near-term goal of 100,000 locations?

A: Focus on various products to onboard stores, with visibility into downrange opportunities and discussions with large distributors.

Q: Lifeline progress in California?

A: Methodically targeting states with higher Lifeline amounts, expecting enhanced Lifeline product potentially doubling the current amount.