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Date
Wednesday, November 12, 2025 at 5 p.m. ET
Call participants
- Chief Executive Officer — Brian Cox
- Chief Financial Officer — Tony Evers
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Takeaways
- Total Revenue -- $18.7 million, up 292% year over year and over 62% sequentially, mainly from MVNO Torch Wireless and point of sale and prepaid services.
- Gross Profit Loss -- $2.6 million, compared to a $7.8 million gross loss in the prior year, reflecting narrowing losses and improvement in gross margin.
- SG&A Expenses -- $4.2 million, a 32.5% decrease compared to $6.2 million the previous year, driven by lower contractor, consultant, and compensation expenses.
- Net Loss -- $7.5 million, translating to negative $0.38 per share, with an operating loss of $7 million, improved from a $14.3 million operating loss in the prior year.
- Cash and Equivalents -- $2.5 million as of September 30, 2025, down from $11.8 million as of December 31, 2024.
- Lifeline Subscribers -- Over 125,000, rising from 20,000 in June and positioned for further growth due to ongoing expansion of sales channels.
- LinkUp Mobile Activations -- Grew from 10,000 users at full launch in April to over 20,500 in July, now surpassing 95,000 active recurring subscribers driven by expanded retail distribution and targeted marketing.
- Point of Sale and Prepaid Services Revenue -- $13.1 million, up 177%, reflecting increased contributions from LinkUp Mobile and the "Phone in a Box" product.
- Wholesale (MVNE) Partnerships -- Three MVNO partners onboarded, serving thousands of subscribers with scalable platform potential and expectation to add more wholesale clients in the next six months.
- Clearline Launch -- SaaS marketing platform deployed in 17 convenience store locations; recent partnership with CorePay enables integration into cloud-native payment processing for future recurring revenue opportunities.
- 2026 Revenue Guidance -- Management reiterated expectation of $225 million in revenue for 2026.
- Data Monetization Initiative -- Newly launched growth marketing and data partnerships division reengineers the DigitizeIQ platform to monetize subprime consumer marketing data for high-margin recurring revenue.
- Lifeline Program Stability -- CEO Cox emphasized, "Lifeline remains fully funded and unaffected by the current government shutdown, providing us with a stable, predictable recurring revenue base."
Summary
SurgePays (SURG 15.23%) reported a sharp revenue surge in the latest quarter, supported by the rapid expansion of both subsidized and prepaid wireless service lines and technology-driven distribution. Scaling efforts in both retail and wholesale channels have increased active subscriber counts across platforms, while execution in targeted marketing and new partnerships are positioned to generate additional high-margin revenue. Cost controls and process improvements reduced operational losses, although cash balances contracted as investment continued. The company positioned its recently developed data-driven platforms and SaaS offerings as key future revenue drivers as it maintains 2026 revenue guidance, highlighting stability in government-backed programs as foundational to near-term and ongoing growth.
- Management stated the company has "The third quarter was that inflection point." and transitioned from foundational buildout to an execution and scale phase.
- "Most of the cost to get Clearline ready for launch has occurred, and we expect the gross margin to be positive by 2025 for this revenue channel," according to the CFO.
- Quarterly performance and subscriber data support management's assertion of recurring revenue growth across all service segments, including a new emphasis on monetizing consumer marketing data.
Industry glossary
- MVNO (Mobile Virtual Network Operator): A wireless service provider that does not own its own network infrastructure but leases capacity from incumbents to offer branded wireless product to end customers.
- MVNE (Mobile Virtual Network Enabler): A company providing backend infrastructure, billing, and provisioning services that allow MVNOs to function without owning core network systems.
- Lifeline Program: A U.S. government-subsidized benefit program providing wireless connectivity to qualifying low-income consumers.
- Point of Sale (POS): The platform or location where retail transactions are executed, including hardware and software facilitating payment and product activation for consumers.
Full Conference Call Transcript
Brian Cox: Good afternoon, and thank you for joining us. As I mentioned last quarter, today is less about the past and more about what is happening now and what is ahead. The third quarter was that inflection point. During the quarter, we began to see execution across our multichannel growth platform, which yielded strong growth year over year and sequentially. Each of our revenue channels is synergistic, not isolated initiatives, that together strengthen with every subscriber transaction and retailer added to our ecosystem. It consists of Torch Wireless, which is subsidized under the Lifeline program, LinkUp Mobile, our prepaid offering, Hero, MVNE, or wholesale offering, prepaid top-up, and our Clearline SaaS point of sale.
We believe our strength lies in our ability to combine cutting-edge technology with a nationwide retail distribution network, bringing telecom and fintech products directly to underserved communities where people live and shop. This powerful combination of technology and retail provides us with a sustainable competitive advantage, positioning us as a long-term leader in a large total addressable market that is very difficult to replicate. Our experienced team has been strategically investing and building since 2022, focusing on integration with AT&T, operational infrastructure, technology, and talent deployment. Today, the platform and development of distribution technology and new products are well established and will support high-margin revenue streams for years of sustained growth.
This synergy generates recurring revenue, provides competitive advantages that are extremely difficult to replicate, and lays the foundation for significant year-over-year growth. The 2025 represents our preparation, investment, and ability to execute on a go-to-market strategy once again. Third quarter 2025 revenue totaled approximately $18.7 million, an increase of 292% year over year and over 62% sequentially. Revenue growth year over year was driven by an increase from virtually zero in 2024 to $5.6 million in 2025 from MVNO brand Torch Wireless, under the subsidized Lifeline program. The Lifeline program is a government-subsidized benefit program that provides essential wireless connectivity to those who qualify.
Unlike temporary programs, Lifeline remains fully funded and unaffected by the current government shutdown, providing us with a stable, predictable recurring revenue base. Today, we have over 125,000 subscribers and growing. After activating in June with only 20,000 subscribers, what is even more exciting is that we are still well below our current capacity. Many sales channels are still being opened, so we expect continued sales growth. This positions us exceptionally well for continued growth in the months ahead. What excites our management team even more is the new avenues for acquiring customers with little or no cost, completely flipping the front-heavy ROI portion of our model. I will speak more on this exciting development later.
While we believe Lifeline will certainly be the accelerator of growth in the short term, we have full confidence that our other revenue streams will scale quickly in 2026. Point of sale and prepaid services, for example, also increased significantly year over year to $13.1 million, a 177% increase. This part of our ecosystem consists of LinkUp Mobile, our affordable prepaid wireless offering, and consumer products like Phone in a Box, a grab-and-go kit for convenience stores, which includes a smartphone, SIM, and thirty-day service. We fully launched LinkUp Mobile in April, activating approximately 10,000 users. In July, we more than doubled that, surpassing 20,500 activations, and today, we are over 95,000 recurring active subscribers.
This growth is driven primarily by expanded retail distribution, targeted marketing, and competitive pricing. The grind of market adoption takes longer on the prepaid side of the wireless business, but we are seeing the expected traction. These drivers are sustainable as we continue opening new doors and building customer loyalty. The heart of this model is our proprietary point of sale software. Not only does it facilitate transactions, but it also drives recurring revenue from activations and replenishments right at the convenience store register. It is not just a tool; it is the backbone of our ecosystem and a true competitive advantage. Third-party prepaid wireless top-ups revenue is a key indicator of future revenue growth in our other products.
For Phone in a Box, we partner with distributors like HT Hackney, which has mass market reach and services over 40,000 stores. We are in advanced talks with other national convenience store distributors, each with footprints in tens of thousands of community store retail locations like HT Hackney. Our near-term goal is to ramp to 100,000 operating on the SurgePays, Inc. platform, driven by a combination of organic growth and distribution agreements with HT Hackney and other partners. On the wholesale side, our MVNE platform, Hero, is a growing revenue engine with a robust pipeline. As an MVNE, we provide billing, provisioning, SIMs, and eSIMs to other wireless companies. A high-margin model with minimal incremental costs and low overhead.
Many MVNOs in the market today are actually sub-MVNOs. We are one of the few with direct carrier access, putting us in a rare and powerful position. To date, we have onboarded three MVNO partners. Collectively, these partners serve thousands of subscribers, and they are looking to grow quickly, providing us with a path to scale our platform and recurring revenue base. In August, we had a successful show at All Wireless and Prepaid Expo with the expectation of onboarding and integrating new wholesale clients over the next six months. Lastly, we have Clearline, our SaaS marketing platform with interactive point of sale and customer engagement tools with offers, coupons, and loyalty programs.
We recently announced a strategic partnership with CorePay, a next-generation payment technology provider, to integrate with our Clearline marketing and customer engagement platform into CorePay's cloud-native payment processing solution. This integration brings together two complementary technologies, point of sale payments and digital marketing automation, creating a first-of-its-kind capability that enables retailers to engage customers from the moment of the transaction and beyond. By embedding Clearline's SaaS-based marketing tools directly into CorePay's payment ecosystem, the partnership is expected to create new recurring revenue streams for both companies while offering value-added functionality to merchants and resellers.
Our strategy is to layer software and digital engagement tools on top of our existing POS infrastructure to create sticky recurring revenue while adding tangible value for our partners and their merchants. Clearline is active in 17 market basket convenience store locations today. However, there are hundreds of thousands of potential retailers beyond convenience stores, from tire shops, food trucks, restaurants, and salons. SurgePays, Inc. is no longer building the foundation. The foundation is built. Now it is truly all about execution, scale, and growth. Our immediate goal is to achieve profitability with minimal impact on the cap table and dilution.
Our strategy is executing precisely according to plan, and I am confident in our highly skilled team that is well-equipped to navigate this industry. We are well-positioned to continue this strategy through the remainder of 2025 heading into 2026. We have proven we can move fast, and with our diversified and competitive moat, we are uniquely positioned to deliver sustainable long-term shareholder value. Therefore, we remain confident in our 2026 revenue guidance of $225 million. We have built a powerful engine that blends technology, innovation, and distribution. Today, we have the products, partnerships, and infrastructure to enter the next phase of high growth. Thank you for your support and belief in our mission.
I will now turn it over to Tony for a detailed review of our Q3 financials. Tony?
Tony Evers: Thank you, Brian, and good afternoon, everyone. Third quarter 2025 revenue totaled $18.7 million, an increase of 292% year over year, as compared to $4.8 million for 2024, driven by an increase in MVNO and point of sale and prepaid services revenue. Gross profit loss narrowed to $2.6 million for 2025 compared to a gross profit loss of $7.8 million for 2024. We expect to continue the improvement of gross margin in the point of sale and prepaid services segment during 2025. Most of the cost to get Clearline ready for launch has occurred, and we expect the gross margin to be positive by 2025 for this revenue channel.
As we continue to expand both subsidized Lifeline and non-products, LinkUp Mobile, of the MVNO segment in 2025, we also anticipate gross margins in the MVNO segment will increase with an aim to return to positive results. SG&A expenses decreased 32.5% year over year to $4.2 million during 2025 as compared to $6.2 million for 2024. The decrease was primarily due to a reduction in contractor and consultant expense along with compensation expense. Loss from operations was $7 million in 2025, compared to $14.3 million in 2024. Our reported net loss and loss per share for 2025 were $7.5 million and negative 38¢ per share.
Turning to the balance sheet, our cash, cash equivalents, and investment balances as of September 30, 2025, were $2.5 million compared to $11.8 million as of December 31, 2024. As Brian mentioned, we are providing revenue guidance of $225 million for 2026. At this time, I would like to turn the call back over to Brian for closing statements.
Brian Cox: Thanks, Tony. Before we open the call for questions, I do want to take a moment to discuss the recently announced launch of our new growth marketing and data partnerships division. The initiative marks yet another significant step forward in our strategy to transform our expanding consumer data ecosystem into a scalable, high-margin growth engine. This engine was built by reengineering our legacy LogixIQ system, called DigitizeIQ, which was originally developed for consumer intake and lead generation serving mass tort law firms. Management made the decision over a year ago to close down operations as this was a completely different line of business. We wanted laser focus on our business plan.
Our development team has now transformed the DigitizeIQ platform into a powerful intake engine designed explicitly for underserved subprime consumer marketing and data collection. Instead of simply signing up wireless customers, we now operate a platform that connects affiliates and publishers within a unified ecosystem. This capability transforms verified consumer data into actionable marketing intelligence, creating multiple revenue opportunities from each customer relationship. While promoting government-subsidized programs such as Lifeline to underserved consumers, we can simultaneously present a targeted marketplace of complementary products and services to our expanding database. Our ongoing objective has been to reduce customer acquisition costs by generating incremental revenue from adjacent services.
We have now reached the next phase: monetizing this data ecosystem to produce recurring high-margin revenue and deliver sustained value for shareholders.
In essence, we have built a platform capable of generating revenue during the customer acquisition process rather than incurring a cost to acquire each customer. This initiative is expected to generate high-margin recurring revenue through data partnerships, analytics integrations, and targeted marketing programs. We believe the consumer data for this subprime market is valuable, and the market has ballooned to over 137 million people. As SurgePays, Inc. continues to scale its wireless and fintech operations, the combination of customer intelligence and marketing execution will serve as a long-term competitive advantage. To summarize, Q3 was a significant inflection point for our company. We are now in acceleration mode, and the numbers already reflect it.
Our activation growth, expanding distribution, and scalable technology platforms give us confidence that we are on the right path to create significant shareholder value. I would like to thank our shareholders for their continued support and the team for their tireless efforts in making this growth possible. Operator, please open the call for questions.
Operator: Absolutely. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, while we poll for questions. If you have a question or a comment. The first question comes from Ed Woo with Ascendiant Capital. Please proceed.
Ed Woo: Yes. Congratulations on all your progress that you are making. My question is on the consumer that you are the underserved market that goes to a lot of these convenience stores. What are you hearing from either the convenience store's owners of what they are seeing and whether this customer base is able to, you know, be receptive to these new products that you are introducing?
Brian Cox: Hey, Ed. Thanks for the question. The feedback that we get is very similar to some of the, let's just call it, the tough time feedback that we have seen over the past twenty-five years working with convenience stores. At times when there is doubt and uncertainty, that is when people are more open to other values or other products. Or because now they are reconsidering, you know, the life of the rut in the road. They are looking for maybe different paths to make ends meet. So we see this as a huge opportunity for us timing-wise. You know?
And we mentioned that there is a research brief that just came out where the subprime market, excuse me, has ballooned from 100 million to 137, 138 million in the past four years. You know, while that could be debated on, you know, the greatness for our country, for our company, it is fantastic because those are the people that we look to provide products and services for, lower cost, better value, and more efficiently than what other companies and our competitors may do because of our distribution model. So the openness from the customer base is fantastic. And let us flip the keep in mind, we have end customer end users.
But we also look at those store owners as clients. So those store owners, likewise, are looking for other ways to make money. They are looking for other ways to provide services to their community. So now where you may have had a convenience store owner who is kind of stuck in his way as well, that rut in the road, we call it, now he is looking for ways to make a couple extra $100 a month. So when a company like us comes along that has a point of sale platform, and then has Clearline, and you put those two things together and it does not cost them a dime to launch products through his store.
And keep in mind, he will be able to take prepaid wireless payments for any carrier, he will be able to do activations for our prepaid wireless and make a significant commission on that. He will be able to take payments on that. He will be able to also offer anyone that comes in and uses that SNAP EBT card a free wireless service, and he will get paid for that. He will be able to provide those products to his community and, likewise, that foot traffic coming in will increase from the things he is providing his community. So we see it as a win-win-win. Get access to more customers.
The store owner increases his revenue and profits through providing more services, and then the consumers who go in those stores who are now more aware, maybe not just in that rut in the road, are going to be looking for other ways to save money and make ends meet.
Ed Woo: That sounds good. And my last question is, there has been a little bit of consolidation with the major, you know, convenience store brands. Is that going to impact your business at all? You think that is, you know, going to be the future of, I guess, convenience stores?
Brian Cox: The convenience store market is an interesting one. It is almost a case study in business. You know, the distributors, we have talked about this before. The distributors to convenience stores are usually second and third-generation companies. Quite a few of them, like your H.T. Hackney, Long, McLean, talking about almost 100-year-old companies. So the convenience store business, regardless of what sign is out on the gas pump, or, you know, the coming and going of private equity or acquisition, at the end of the day, even 7-Elevens, it is pretty shocking to see the number of people that actually run that store and have control over the store.
And then they have a portion of the store where they can bring in any product they want. And, you know, they have to do the 7-Eleven carry certain products, if you will. But, you know, there is still the autonomy and decision-making of that ultimate store owner, who nine times out of ten is also the clerk. So we work really, really hard to build a relationship with the store owner, the person benefiting from our products. And keep in mind, for those that do not know or do not remember, we are in the checking account. We have a, you know, not just something where people are signing a PO and sending us a check.
We are actually integrated with them from a business perspective. We are pushing and pulling money based on commissions they make, based on us ACHing them. So there is a pretty significant trust with that business owner, so we do not see that affecting us at all. If anything, there again, it creates an awareness of who we are and an openness to listen to what we have to say based on what we can bring to the table for their financials.
Ed Woo: Great. Well, thanks for answering my questions, and I wish you guys good luck.
Brian Cox: Thank you.
Operator: Thanks, Ed. We have reached the end of the question and answer session. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.