SurgePays, Inc. reported significant financial changes in its 10-Q filing for the period ending September 30, 2024. The company experienced a substantial decline in revenue, with total revenues for the nine months ending September 30, 2024, amounting to $51.3 million, a decrease of 51.1% from $104.8 million in the same period of 2023. This decline was primarily driven by a sharp drop in revenue from its Mobile Virtual Network Operator (MVNO) segment, which fell to $41.4 million from $89.5 million year-over-year, largely due to the cessation of funding from the Affordable Connectivity Program (ACP) on June 1, 2024.

In terms of profitability, SurgePays reported a net loss available to common stockholders of $25.9 million for the nine months ended September 30, 2024, compared to a net income of $17.6 million for the same period in 2023. The loss from operations for the nine months was $(23.4 million), a stark contrast to the income of $18.0 million reported in the previous year. The company’s gross profit also suffered, resulting in a gross loss of $(3.1 million) for the nine months ended September 30, 2024, compared to a gross profit of $28.2 million in 2023.

SurgePays' total assets decreased slightly to $41.5 million as of September 30, 2024, from $41.9 million at the end of 2023. However, total liabilities saw a significant reduction, dropping to $8.2 million from $13.5 million, leading to an increase in stockholders' equity from $28.4 million to $33.3 million during the same period.

Strategically, SurgePays made notable moves, including the acquisition of ClearLine Mobile, Inc. for $2.5 million, aimed at enhancing its software platform. The company also initiated a share repurchase program in August 2024, under which it reacquired 280,770 shares for $485,131 before terminating the program in October 2024. Additionally, SurgePays plans to expand its Comprehensive Platform Services segment, which has shown growth, increasing its revenue to $9.9 million from $8.6 million year-over-year.

The company’s operational challenges are compounded by the loss of ACP funding, which previously accounted for over 70% of its revenue. SurgePays anticipates further losses in 2024 and is exploring options to replace this lost revenue, although it currently lacks commitments for additional capital.