SURGW - SurgePays Announces First Quarter 2024 Financial Results | Benzinga

BARTLETT, Tenn., May 13, 2024 (GLOBE NEWSWIRE) -- SurgePays, Inc. (NASDAQ:SURG) ("SurgePays" or the "Company"), a technology and telecom company focused on the underbanked and underserved, today announced its financial results for the first quarter ended March 31, 2024.

Management Commentary

Chairman and CEO Brian Cox commented on the quarter's results, "The first quarter of 2024 was highlighted by continued execution on our growth strategy and solid profitability. With a substantial cash balance of over $42 million and a full product suite, we believe we are well-positioned to become one of the country's largest distributors of prepaid wireless and underbanked financial technology services. The uncertainty surrounding ACP funding sparked a refreshing sense of urgency to grow our business. We believe our strategic hires, new technology, cash in the bank, and other corporate initiatives have put us in a great position.

"First quarter revenues of $31.4 million were impacted by operational changes by management last year to shift our focus away from our non-core business Lead Generation subsidiary LogicsIQ. This effectively eliminated the $3.2 million of revenue that LogicsIQ contributed in 2023; however, it allowed our team to be completely focused on verticals aligned with our profitable and scalable business model. Despite the quarterly loss in Lead Generation revenue, we believe our new focus will benefit the Company in the long term. Most shareholders know there was a mandated pause in new ACP enrollments on February 7. Even with the pause in new enrollments, our Mobile Virtual Network Operator (MVNO wireless) revenue increased from $28.7 million in the first quarter of 2023 to $28.9 million in the first quarter of 2024. Net income was $1.2 million, which included $2 million in non-cash stock charges.

"Regarding the Affordable Connectivity Program, or ACP, there are currently several proposals in Congress to fund the program. Several members of Congress on both sides of the line have expressed support for the program, including but not limited to Senator Kaine, who said ‘Access to high-speed internet is a necessity. I was proud that we took steps to make internet more affordable for millions of families as part of the Bipartisan Infrastructure Law,' and Senator Padilla who said, ‘We must fully fund this program to ensure millions of families can afford to get connected at home.' Senator JD Vance stated ‘That's why I'm doing all that I can to ensure the ACP has the funding it needs. I'm proud to introduce this amendment with Senator Luján because it reflects a bipartisan consensus of the Senate. I look forward to getting this done.'  We hope that based on the strong support from Congress on both sides, this essential program, which assists more than 20 million households, will continue to be funded. While we hope ACP funding passes, we aren't waiting for approval and have created a plan to expand revenue in our non-ACP businesses.

"Our team has put together a comprehensive strategic plan that we are confident will enable us to grow our SurgePays nationwide network, which is a product-agnostic delivery system to the underbanked and underserved utilizing convenience stores as the points of distribution. If the ACP is funded, we will be in a fantastic situation immediately. If the ACP is not funded, in the next 12 months, we will look to grow revenue to levels not just to replace the ACP revenue but exceed it with the rollout and scaling of our prepaid wireless company, LinkUp Mobile. Keep in mind that if ACP is not funded, millions will be looking for a new prepaid wireless company to replace their subsidized service. We believe our relationship with our existing ACP base and access to those utilizing other ACP companies will give us the upper hand in converting these folks into LinkUp Mobile customers. In any scenario, we believe we have the team, the products, and the distribution to be extremely successful regardless of how the ACP funding situation plays out."

First Quarter 2024 Results Conference Call

SurgePays management will host a webcast at 5 p.m. ET / 2 p.m. PT to discuss these results.

The live webcast of the call can be accessed at 1Q24 Webcast Link, as well as on the company's investor relations website at ir.surgepays.com.

Telephone access to the call will be available at 877-407-0784 (in the U.S.) or by dialing 201-689-8560 (outside U.S.).

A telephone replay will be available approximately one hour following completion of the call through May 27, 2024. To access the replay, please dial 844-512-2921 (in the U.S.) or 412-317-6671 (outside U.S.). Enter Access ID#: 13746599.

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 Business Outlook 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, the funding of the ACP program by the US government for the periods after April 2024, which at this time has not been funded. 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 ACP will be funded after April 2024, 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.

Investor Relations
Brian M. Prenoveau, CFA
MZ Group – MZ North America
SURG@mzgroup.us 
561 489 5315

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