SurgePays Reports 66.3% Revenue Decline and $7.6 Million Operating Loss in Latest Quarter

SurgePays, Inc. reported significant financial challenges in its latest 10-Q filing for the quarter ending March 31, 2025. The company generated revenues of $10.6 million, a substantial decrease of 66.3% from $31.4 million in the same period last year. This decline was primarily attributed to the cessation of funding from the Affordable Connectivity Program (ACP), which had previously supported a large portion of its subscriber base. The Mobile Virtual Network Operator (MVNO) segment, which includes SurgePhone Wireless and Torch Wireless, saw revenues plummet by 92.1%, from $28.9 million to $2.3 million. In contrast, the Comprehensive Platform Services segment experienced growth, with revenues increasing from $2.5 million to $8.3 million, reflecting a renewed focus on this area and an expanded sales force.

The company's total costs and expenses for the quarter were $18.2 million, leading to an operating loss of $7.6 million, compared to an operating income of $1.8 million in the prior year. The loss was exacerbated by a significant increase in costs associated with the Comprehensive Platform Services segment, which rose to $8.3 million from $2.5 million. General and administrative expenses also decreased to $4.6 million from $6.4 million, indicating efforts to cut costs amid declining revenues.

In terms of operational metrics, SurgePays reported a total of 80,000 subscribers transitioned to the Lifeline program, which is expected to provide a more stable revenue stream moving forward. The company has also initiated several strategic initiatives, including the launch of LinkUp Mobile SIM cards and a "phone in a box" program aimed at expanding its retail presence. Additionally, SurgePays is leveraging its Mobile Virtual Network Enabler (MVNE) capabilities to offer services to other wireless companies, which could enhance its market position and revenue potential.

The company’s financial position has weakened, with total assets decreasing to $15.7 million from $24 million at the end of 2024. Current liabilities also fell to $5.7 million from $6.1 million, resulting in a working capital surplus of $4.1 million. However, the accumulated deficit has grown to $68.6 million, raising concerns about the company's long-term viability without additional funding. SurgePays is currently exploring various strategic opportunities to secure funding, although no commitments have been made as of the filing date.

Looking ahead, SurgePays aims to enhance its market visibility and customer reach, particularly through its MVNO offerings. The company plans to diversify its revenue streams by expanding into new geographic areas, particularly California, and to sustain platform growth to bolster baseline revenue. However, the outlook remains uncertain due to the recent loss of ACP funding and the need for additional capital to support ongoing operations.