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Migration of former ACP Subscribers to Lifeline Well Underway BARTLETT, Tenn. , Nov. 12, 2024 /PRNewswire/ -- SurgePays, Inc.
(Nasdaq: SURG ) ("SurgePays" or the "Company"), a bridging critical financial and connectivity gaps in underserved communities, today announced its financial results for the third quarter ended September 30, 2024 . Management Commentary Chairman and CEO Brian Cox commented on the quarter's results, "We anticipated a challenging third quarter, and we seized it as an opportunity to reset, recalibrate, and accelerate. With every team member intensely focused, we're advancing toward becoming cash flow positive as quickly as possible.
We are aligning sales, integration, and strategy to generate new revenue streams across each of our business segments. This quarter wasn't a setback but a setup, priming us for long-term, sustainable growth. "In the third quarter of 2024, SurgePays reported $4.
8 million in sales, aligning with expectations for our first full quarter without Affordable Connectivity Funding (ACP) since mid-2021. Our Mobile Virtual Network Operator (MVNO) revenue was $23,609 compared to $30.2 million in the same quarter last year, reflecting the anticipated funding shift.
Meanwhile, sales in our Prepaid Platform Services segment surged 69% to $4.7 million , showcasing significant growth momentum. "Gross profit (exclusive of depreciation and amortization) swung to a $7.
8 million loss in the third quarter from a $10.5 million profit in the year-ago period due to our strategic decision to utilize our strong balance sheet to protect our previous ACP subscriber base and distribution network. With ACP funding ending, our immediate focus was on how to retain and preserve these hard-earned customers within the SurgePays ecosystem.
We chose to temporarily self-fund our MVNO operations, prioritizing customer continuity while facilitating a seamless transition to Lifeline, another government-subsidized program. By maintaining connectivity for our low-income customers, we made a socially responsible and strategic choice that positions us well for potential long-term economic returns. We expect this decision to be both customer-centered and financially astute in the long run.
"Our recent Master Services Agreement with TerraCom, Inc., a licensed Lifeline provider, represents a pivotal step. This partnership allows us to migrate up to 280,000 subscribers to Lifeline, establishing a steady alternative subsidy channel.
In tandem, our sales teams are now actively engaging new customers, reigniting growth initiatives, and leveraging our SurgePays platform's point-of-sale capabilities at convenience stores. While ACP remains uncertain, our subsidized revenue channel is robustly supported by the Lifeline program. The team and platform built for ACP is now enrolling thousands of Lifeline customers daily without distracting from our core business focus.
This department has been overwhelmed and has had to hire additional employees for the sales onboarding team. Our team has now enrolled over 70,000 customers in the Lifeline program, and we believe our Lifeline subscribers potential can far outpace our highest ACP subscriber count. "Meanwhile, our retail prepaid brand, LinkUp Mobile, has proved to be a more significant opportunity than initially anticipated, and to capture maximum market share, we moved decisively to secure a direct carrier connection.
We anticipate this partnership will enable us to quickly generate hundreds of thousands of new subscribers and establish LinkUp Mobile as a formidable presence in the prepaid space. "Our SurgePays Prepaid Top-ups platform is experiencing exponential growth as a critical element in store readiness for LinkUp Mobile activations. As a prerequisite to LinkUp activations, stores join our platform, which also facilitates prepaid reloads.
This channel's monthly revenue growth has surged nearly 400% in just five months, reaching over $2.2 million in monthly revenue — a trend we expect will continue as market demand intensifies. "Our ClearLine Point of Sale (POS) SaaS platform is emerging as a high-potential asset within SurgePays.
This advanced platform redefines the in-store customer experience by transforming POS terminals and customer-facing screens into interactive engagement tools. ClearLine's patent-pending application supports in-store marketing campaigns, loyalty enrollment, and QR code interactions, effectively replacing traditional posters with smart TVs for dynamic QR-code advertising and instant coupon redemptions. By enhancing revenue per store and elevating customer satisfaction, ClearLine offers retailers actionable insights, driving growth and loyalty.
Following years of development, ClearLine is now ready for market deployment, and as it gains traction, we anticipate it will contribute meaningfully to consolidated revenues by Q1 2025. "While we continue investing across our four business channels, we're also laying a robust foundation for rapid, sustainable growth. Recently, we opened a dedicated sales and operations center in El Salvador , a project over a year in the making and a strategic move in anticipation of growth across all our verticals.
Nearly 100 experienced team members, previously outsourced, are now full-time SurgePays employees, bringing continuity and expertise essential for our ambitious expansion and product launches. This new facility marks a pivotal evolution from our longstanding outsourcing strategy, which enhances customer relationships and maximizes sales opportunities. "At SurgePays, we're driven by four pillars of success: team, product, distribution, and funding.
With what I believe is the most seasoned team in prepaid wireless, a market-leading product suite, proprietary distribution channels, and $24 million in cash, cash equivelants, and investments as of September 30, 2024 , we're positioned to execute our growth strategy with precision. Over the next few months, we expect each of our four business segments to create a momentum that drives continuous growth and improvement, generating synergistic and scalable recurring revenue." Third Quarter 2024 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: Third Quarter Results Call . Telephone access to the call will be available at 877-545-0320 (in the U.S.
) or by dialing 973-528-0002 (outside the U.S.).
Participant access code is 801757. A telephone replay will be available approximately one hour following completion of the call until November 26, 2024. To access the replay, please dial 877-481-4010 (in the U.
S.) or 919-882-2331 (outside the U.S.
). Replay passcode is 51609. Share Repurchase Authorization During the third quarter, SurgePays' board of directors authorized the company to repurchase up to $5 million of common stock in the open market within six months from implementation of the program.
The company repurchased $485,131 of treasury shares in the third quarter. About SurgePays, Inc. SurgePays, Inc.
is a technology and telecom company focused on the underbanked and underserved communities. SurgePays' technology-layered platform empowers clerks at over 8,000 convenience stores to provide a suite of prepaid wireless and financial products to underbanked customers. SurgePays prepaid wireless companies provide services to over 250,000 low-income subscribers nationwide.
The company ranks as the 345th fastest-growing tech company in North America according to the 2023 Deloitte Technology Fast 500. Please visit 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. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or of our financial information or state other forward-looking information.
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 that the expectations reflected in these forward-looking statements such as regarding our market potential along with the statements under the heading Management Commentary 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 our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements including but not limited to, our plans to expand our prepaid wireless company and the stock buyback program, our ability to retain our subscribers on a free monthly plan subsidized by a sister program, our ability to obtain a company that has the license to subsidize our subscribers through a sister program and our expanded service and offerings . 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, whether the ACP is funded again, our ability to obtain a company that has the license to subsidize our subscribers through a sister program, 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.
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, 2023 . 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.
SOURCE SurgePays.
