BARTLETT, Tenn. - SurgePays, Inc. (NASDAQ: SURG), a technology and telecommunications company, has entered into a multi-year agreement with AT&T to offer a suite of mobile wireless services. This arrangement positions SurgePays as a mobile virtual network operator (MVNO), leveraging AT&T's extensive 4G LTE and 5G network, which reaches over 99% of Americans.
The collaboration, announced on November 21, 2024, enables SurgePays to offer its customers dependable voice, data, and messaging services. This move is seen as a significant step for SurgePays, with Chairman and CEO Brian Cox expressing the transformative nature of the agreement. He highlighted the potential for service integration and the opportunity to support other companies aiming to become MVNOs.
SurgePays aims to penetrate underserved and rural markets, utilizing its network of convenience stores and neighborhood locations to distribute prepaid wireless and financial products. The company's transaction platform for processing and activations is expected to allow it to offer these services at competitive prices, catering to a market segment with a pronounced need for affordable solutions.
Joseph Gomez, appointed as vice president of MVNO Operations in July, brings extensive experience from his time at AT&T. His role involves driving SurgePays' MVNO strategy with an emphasis on increasing market share.
While this press release outlines SurgePays' plans and expectations for the future, it also contains forward-looking statements that involve risks and uncertainties. These statements are not guarantees of future performance, and actual results could differ materially from those projected.
SurgePays, Inc. specializes in providing prepaid wireless and point-of-sale platform services in communities with limited access to such services. More information about the company can be found on its website.
This article is based on a press release statement and has been written to provide factual information without endorsement of the claims.
In other recent news, SurgePays, Inc. experienced a significant downturn in its third-quarter revenue for 2024, with figures dropping by 86% to $4.8 million, primarily due to the conclusion of the Affordable Connectivity Program (ACP) funding. Despite the decline, SurgePays reported a 69% increase in platform service revenue, reaching $4.7 million, and a 400% growth in monthly revenue for its prepaid top-ups platform. The company is now focusing on transitioning its 280,000 MVNO subscribers to the Lifeline program and enhancing its prepaid wireless brand, LinkUp Mobile, through a new partnership.
These are recent developments following the cessation of ACP funding. SurgePays aims to reach 200,000 Lifeline subscribers by year-end and is targeting underserved markets with the planned soft launch of LinkUp Mobile in early Q1 2025. The company also revealed a loss from operations of $14.3 million, a significant shift from the $7.1 million profit reported in the same period last year.
SurgePays is strategically positioning itself for sustainable growth despite the challenges faced in the third quarter, leveraging its robust cash balance of $23.7 million and existing infrastructure to improve its financial standing. The company's efforts are expected to yield improved market traction in Q1 2025 due to a new contract enhancing service capabilities and pricing.
InvestingPro Insights
SurgePays' recent agreement with AT&T marks a significant strategic move, but the company's financial metrics reveal some challenges. According to InvestingPro data, SurgePays has experienced a substantial revenue decline, with a 40.73% drop in the last twelve months as of Q3 2024. This aligns with an InvestingPro Tip indicating that analysts anticipate a sales decline in the current year.
Despite the potential growth opportunity presented by the AT&T partnership, SurgePays' current financial position shows some vulnerabilities. The company's gross profit margin stands at a low 5.2%, which is reflected in an InvestingPro Tip highlighting weak gross profit margins. This could impact the company's ability to offer competitive pricing in the MVNO market as mentioned in the article.
On a positive note, SurgePays holds more cash than debt on its balance sheet, and its liquid assets exceed short-term obligations, as noted by InvestingPro Tips. These factors could provide some financial flexibility as the company pursues its expansion into the MVNO space.
For investors considering SurgePays' potential, it's worth noting that the stock is currently trading at a low revenue valuation multiple, according to another InvestingPro Tip. This could present an opportunity, but it should be weighed against the company's recent performance and future prospects.
InvestingPro offers 13 additional tips for SurgePays, providing a more comprehensive analysis for those interested in deeper insights into the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.