The following is a summary of the SurgePays, Inc. (SURG) Q3 2024 Earnings Call Transcript:

Financial Performance:

• SurgePays reported Q3 revenue of $4.8 million, down from $34.2 million in Q3 2023.

• MVNO revenue was significantly reduced to $23,609, due to the shutdown of ACP funding.

• Platform services revenue increased to $4.7 million from $2.8 million, showing growth in this area.

• Gross profit was down to a $7.8 million loss, compared to a $10.5 million profit the previous year, primarily due to the ceasing of ACP funding.

• Operating expenses soared by 97% primarily because of non-cash stock compensation and consulting fees.

• The net loss was $14.3 million, with a $0.73 loss per share, heavily impacted by the end of federally funded ACP.

Business Progress:

• SurgePays is transitioning ACP customers to Lifeline, to retain customer base and service continuity.

• Entered into a Master Service Agreement with TerraCom Incorporated for Lifeline services, migrating 280,000 subscribers.

• Launched the ClearLine Point of Sale SaaS platform, expected to generate significant revenue by Q1 2025.

• Opening a new sales and operations center in El Salvador to support expansion and product launches.

Opportunities:

• Developing the retail prepaid brand LinkUp Mobile, moving to secure a direct carrier connection to enhance service offerings and margins.

• Platform's monthly revenue growth surged by nearly 400% in recent months, indicating strong market demand.

Risks:

• There is ongoing uncertainty regarding the future of ACP funding and its impact on customer retention and revenue stability.

• SurgePays is self-funding MVNO operations due to ACP funding ending which could strain financial resources if not managed efficiently.

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