SurgePays Reports 55.6% Revenue Decline, Shifts Business Strategy Amid Financial Loss

SurgePays, Inc. reported a significant decline in financial performance for the fiscal year ending December 31, 2024, with total revenues of $60.9 million, a decrease of 55.6% from $137.1 million in 2023. The company's Mobile Virtual Network Operator (MVNO) segment, which includes SurgePhone Wireless and Torch Wireless, generated $43.5 million, down 63.4% from the previous year. This decline was primarily attributed to the cessation of funding from the Affordable Connectivity Program (ACP), which had previously accounted for a substantial portion of the company's revenue. In response, SurgePays transitioned over 80,000 subscribers to the Lifeline program to maintain its customer base.

The company's operational costs also increased, with total costs of revenue rising to $75.2 million from $101.5 million in 2023. General and administrative expenses surged to $27.5 million, up from $16.8 million, largely due to increased compensation and contractor costs associated with software enhancements and strategic initiatives. As a result, SurgePays reported a loss from operations of $41.8 million, compared to a profit of $18.9 million in the prior year.

Strategically, SurgePays has made significant changes to its business model, including the discontinuation of its lead generation segment, which was deemed misaligned with long-term objectives. The company has also entered into a multi-year agreement with AT&T, enhancing its capabilities as a Mobile Virtual Network Enabler (MVNE) and creating a new revenue channel. This strategic pivot aims to leverage existing infrastructure and partnerships to capture market share in underserved areas.

In terms of operational metrics, SurgePays maintained a subscriber base of approximately 250,000, absorbing costs to keep these customers active despite the loss of ACP funding. The company has focused on expanding its distribution network through convenience stores and local retailers, which are critical for customer engagement and retention. As of March 2025, SurgePays employed over 130 staff members across various functions, reflecting its commitment to scaling operations and enhancing service delivery.

Looking ahead, SurgePays anticipates challenges in replicating past revenue levels without additional funding sources. The company is exploring strategic opportunities for growth, including potential acquisitions and partnerships, while aiming to improve gross margins in its MVNO segment. The management remains cautious but optimistic about future prospects, emphasizing the importance of executing its strategic initiatives to navigate the evolving telecommunications landscape.