SurgePays, Inc. Q4 FY2025 earnings call

2025 Performance - Proved scalability: Q3 showed a step function increase in revenue when capital was deployed into subscriber acquisition, proving the model's scalability. - Capital discipline: Q4 saw a pullback in capital spend to focus on efficiency, with revenue still higher than Q4 2024 despite sequential decline. - Diversification: Have multiple revenue channels including government subsidized wireless, LinkUp Mobile prepaid, wholesale MB&E relationships, and point of sale fintech and data platforms. - Expense reduction: Total general and administrative expense declined to approximately $20.1 million from $27.5 million in 2024. - Infrastructure investment: Continued to invest in core infrastructure like retail distribution network, wireless platform, and digital acquisition capabilities. ### 2026 Outlook - Multiple revenue streams: Have independent revenue streams, an established retail footprint of over 9,000 locations, a customer acquisition engine through ProgramBenefits.com, and additional monetization layers. - Improved cost structure: Estimated monthly cash burn at end of Q1 2026 to be approximately $250,000 to $300,000, a more disciplined operating model.

For the full year 2025, Surge Pays generated approximately $57 million in revenue, including $16.2 million in the fourth quarter. Revenue grew from approximately $10.6 million in Q1 to $11.5 million in Q2, then reached $18.7 million in Q3, with Q4 seeing a sequential decline from Q3 but remaining significantly higher than Q4 2024. Total revenue in 2025 was $57 million compared to $60.9 million in 2024, with the decrease primarily due to the expiration of the affordable connectivity program leading to a decline in subsidized revenue. However, the point of sale and prepaid services segment increased by approximately $26.1 million year-over-year, partially offsetting the decline in MVNO revenue. Cost of revenue for 2025 was approximately $67.6 million compared to $75.2 million in 2024, and gross loss improved to $10.6 million from $14.3 million in the prior year.

- Estimates current monthly cash burn at end of Q1 2026 to be approximately $250,000 to $300,000. ### - Believe they can deploy capital into growth while improving underlying economics with multiple revenue streams and an efficient cost structure, positioning to drive growth in a controlled and repeatable way.

- Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed. ### -需参考SurgePay的最新SEC filings以了解相关风险和不确定因素

Q: Yeah, congratulations on all the progress, Brian. I had a question. You know, I know you're not giving out guidance, but what should we be most excited about of the various products you have that's going to be, you know, the biggest driver for, you know, revenue this year?

A: Hey, Ed, thanks for the question. I think as we look forward, you know, interestingly enough, we've got the subsidized wireless. We've got LinkUp Mobile. And we've got some other kind of exciting things we've talked about that are going to start showing up on the financials. If you had to pin me down right now, LinkUp Mobile is doing really well. You know, starting an MVNO, a prepaid wireless company from scratch, the team's done a phenomenal job. You know, it's definitely a grind getting traction in the market. And keep in mind that, you know, while some of that is sold online, the majority of it is sold through dealerships. and setting up relationships with dealers and sending out point-of-sale materials, getting SIM cards, training folks, and then that store has your product, and usually, let's say, three other prepaid companies as well. So, you know, that's a big deal for us, and it's a staying power, and that's cash flow. And I think that's going to be the one that you'll start seeing some pretty significant numbers off of. And I think we've got some pretty exciting news coming up. with LinkUp Mobile that I wish we had crossed a couple of thresholds before today so we can talk about it today. But, you know, give us something to talk about in the upcoming months.

Q: Great. And one last question I have is, you know, you guys, like I said, serve to underserved markets through your, you know, convenience store operators. What are you hearing from, you know, these operators in terms of the economy is, you know, how are their customers? Are they doing better? Are they worse? Are they open to new products? et cetera.

A: I love this question. As you know, most of the folks on our team have been in this prepaid, subprime, underserved, underbank. There's a lot of words for it and there's different scopes. The largest scope would be the subprime market. But our market at a time of where things are difficult and maybe more expensive in the economy, as they say, too much month, not enough check, there's always going to be a segment on the lower end of that socioeconomic that's not really affected. They're already lower income. It doesn't really hit them as much. I mean, you know, when certain things, your essential services are taken care of by the government, you're kind of below the water break line. If you think about the ocean where waves are crashing, the ups and downs, you're a little bit below that break line. But what's interesting as we've expanded the scope of our company and our target market into the subprime market, we do push up into people that do spend money, that do have money, that don't specifically rely on the government, who are getting squeezed. And I think what we're seeing, the ebbs and flows of all the folks on our team that we talk about this often, you know, 20 years we've been doing this. And when times in the economy get a little difficult, that's when people take a step back and are more aware of their spending, more aware of value. So we've always done the best and had our best runs when things in the economy were tough, because that's when people will listen to you. If you're offering a better value, otherwise it's just a rut in the road. I'm going to pay $40 a month for my wireless service because that's just what I do. And I just pay it and I do it two twenties on the countertop. Boom. But when things are tough and putting two twenties on the countertop at the convenience store, kind of pulls a little bit more for me. You know, it feels a little heavier when I lay it down. Well, then if I look over and say, Hey, wait a minute, I got a company here that would give me the exact same thing for 30 bucks. What is that? What tell me about link up? So I think that it's actually an opportunity for us and it, it opens people's eyes. They're looking up, they're aware of their finances, they're aware of other value. So, and we look to capitalize on that. We never wish ill on the economy, but historically we've done our best and had our best runs when there's a, I don't want to say blood on the streets, that's not accurate, but when the economy is going through a difficult time. Thanks for answering my questions, and I wish you guys good luck.