SurgePays Aktie

Good morning, and welcome to the SurgePays Inc.'s First Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Valter Pinto with KCSA Strategic Communications. Valter, please go ahead.

Thank you, operator, and good morning, everyone. Welcome to the SurgePays first quarter 2026 financial results conference call. Joining me on the call today are Brian Cox, Chief Executive Officer; and Chelsea Pullano, Interim Chief Financial Officer. Before we begin, I'd like to remind everyone that statements made on this call that are not historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Additional information about these risks is included in the company's filings with the Securities and Exchange Commission including its annual report on Form 10-K and subsequent quarterly reports on Form 10-Q.

The company undertakes no obligation to update these statements, except as required by law. With that, I'd like to now turn the call over to Brian Cox. Brian, please go ahead.

Thank you, Valter, and good morning, everyone. Thank you for joining us today. The first quarter of 2026 is the quarter where diversification work of the last 12 months becomes visible in the numbers. Revenue grew approximately 51% year-over-year to $16 million, driven by an approximately 71% increase in point-of-sale prepaid services. At the same time, the cost discipline we set in motion in 2025 reached our general and administrative expense line which declined approximately 25% year-over-year. Today SurgePays operates with multiple revenue channels working in parallel. Total wireless subscriber lines across our LinkUp Mobile and Torch Wireless brands surpassed 200,000 subscribers during the quarter. Our point-of-sale platform continues to scale across a retail footprint of more than 9,000 convenience store locations nationwide.

We have added new monetization channels on top of that footprint, including a stored value and loyalty program and a managed marketing services platform for the in-store media network we launched during the quarter. And we have rebuilt the top of our acquisition funnel through ProgramBenefits.com, which is now serving as both a unified intake and decisioning platform and a monetization layer for the subscribers it brings in. The way to think about this business is straightforward. Every consumer SurgePays acquires can now be paired with additional financial and benefit products distributed through the same platform. That is the compounding model we designed. Q1 is the first quarter where you can see it forming in the financials, and we're going to walk you through each one of the operating pieces that drove that. There are 5 operating themes that define the first quarter and that frame how we expect the rest of the year to unfold. First, wireless subscriber growth.

Total wireless subscriber lines across our LinkUp Mobile and Torch Wireless brands surpassed 200,000 during this quarter. That's a milestone the team has worked toward for several quarters, and it reflects the operational work we have done to scale the prepaid wireless business in-house. To press that momentum further, we initiated a Buy One Get One promotional campaign in our prepaid wireless business designed to drive subscriber growth and increased market penetration across our retail and digital channels. Second, the customer acquisition engine. This is one of the most important shifts inside the company, and I want to spend a minute on it. During the first quarter, we transitioned subscriber acquisition to our in-house growth marketing team.

For the past 5 years, this has been outsourced to third-party ad agencies. Since that transition, we have reduced cost per lead by approximately 28%. Cost per enrollment is down approximately 48% and our lead to enrollment conversion rate is up approximately 39%. We are paying less to acquire each new customer. Fewer of those leads fall out of the funnel and the customers we bring on cost materially less than they did 1 quarter ago. Our marketing team is winning. That is a structural improvement in unit economics that's impactful now but even more so as we ramp up our sales push. On top of that engine, we have continued to scale ProgramBenefits.com as both a unified intake and decisioning platform and as a monetization layer for the subscriber base. Internal upsells, top-up cross-sell, affiliate offers and data partnership initiatives are now generating revenue against those subscribers.

This partially offsets the acquisition costs. In other words, the funnel is starting to pay for itself, and our end of year goal is to continue improving this funnel so we effectively eliminate our cost to acquire customers entirely. Third, wholesale distribution expansion. During the period, we closed 6 new wholesale distribution partners, including 3 master agent agreements covering an aggregate of more than 3,000 retail locations under contract and 3 other independent sales organization agreements. Onboarding is underway with initial volume contribution expected during the second quarter of 2026. The independent sales organization additions alone are expected to lift monthly prepaid top-up volume on our distribution platform by approximately 30% once fully integrated. We have spent years building this retail infrastructure.

Once the infrastructure has been built, it's simple math, with retail channel side execution and more locations offering LinkUp, incremental sales volume increases continually and in proportion. Fourth, retail infrastructure monetization. We launched a fully integrated stored value and loyalty program, enabling merchants to offer branded gift cards, store credit and loyalty programs through the SurgePays point-of-sale system. We also deployed our managed marketing services platform, which converts standard smart TVs mounted in the store into a media network we control for both our products and third-party ads. Both of these are revenue streams that did not exist a year ago and are now being layered on to our same retail footprint.

Fifth, strategic partnerships and platform. We continue to advance our previously announced strategic relationship with Alpha Modus Holdings. As we disclosed in the press release, that framework was executed subsequent to the quarter end on May 1, and the joint pilot -- excuse me, pilot launch was announced on May 12. Also during the period, we executed signed wholesale contracts with multiple MVNO and MVNE customers on our HERO wireless platform. Counterparties are at various stages of technical integration through API connectivity, and one customer has already taken delivery of custom SIM cards in advance of their launch. We expect initial customer rollouts on the HERO platform during the second quarter of 2026, with wholesale wireless revenue contribution anticipated to be reflected in the third quarter 2026 results.

And finally, we advanced a real-time AI decisioning platform built on ProgramBenefits.com and our nationwide retail network designed to expand each customer interaction into a multiproduct revenue opportunity across wireless, financial services and other essential offerings. This is the connective tissue between the acquisition engine, the retail platform and the wholesale relationships I just described. With that, as the operating backdrop, let me turn the call over to Chelsea Pullano, our Interim Chief Financial Officer, to walk through the first quarter financial results in more detail. Chelsea?

Thank you, Brian, and good morning, everyone. Turning to our first quarter 2026 financial results. Revenue for the 3 months ended March 31, 2026, was $16 million compared to $10.6 million in the prior year period, an increase of approximately 51% year-over-year. The growth was driven primarily by an approximately 71% increase in our point-of-sale and prepaid services. General and administrative expenses were approximately $3.5 million in the first quarter compared to approximately $4.6 million in the prior year period, a decrease of approximately 25%. This decline reflects the cost discipline we initiated in 2025 and which is now visible in the reported results. Loss from operations was approximately $11.2 million in the first quarter compared to approximately $7.6 million in the prior year period.

This change primarily reflects the mix of revenue growth against the current cost of revenue, along with increased interest expense and non-cash items. Interest expense, including amortization of debt discount was approximately $0.9 million in the first quarter compared to approximately $0.1 million in the prior year period, reflecting the financing activity executed across the second half of 2025 and into 2026. Net loss available to common stockholders for the first quarter was approximately $12.1 million or $0.51 per basic and diluted share compared to approximately $7.6 million or $0.38 per share in the prior year period.

Turning to cash flow. Net cash used in operating activities improved to approximately $4.6 million in the first quarter compared to approximately $7 million in the prior year period. Net cash provided by financing activities was approximately $5 million. Net change in cash, cash equivalents and restricted cash was a positive $0.4 million for the quarter. On the balance sheet, cash and cash equivalents were approximately $2 million at March 31, 2026, and total cash, cash equivalents and restricted cash were approximately $2.4 million at quarter end. With that, I will turn the call back over to Brian for closing remarks.

Thank you, Chelsea. Let me close with how I am thinking about the rest of the year. We expect continued revenue growth driven by our point-of-sale and prepaid services, supported by the Buy One Get One wireless campaign and the wholesale distribution channel I described earlier. The 6 new distribution partners we signed during the quarter, the 3 major -- excuse me, master agents and 3 independent sales organizations are onboarding now with initial volume contribution expected in the second quarter and ramping through the back half of the year as the master agent locations come online. We expect ongoing benefit on the general and administrative line from cost discipline framework that we put in place in 2025 with G&A continuing to scale at a slower rate than revenue.

We expect the customer acquisition engine to keep compounding. The approximately 28% cost per lead reduction, approximately 48% cost per enrollment induction and approximately 39% conversion lift we delivered in the first quarter were not a one-time campaign. Those metrics reflect a permanent operational change in how we acquire and convert customers. As ProgramBenefits.com matures as both an intake platform and a monetization layer, we expect that engine to keep paying down its own acquisition costs. We expect our new monetization layers, including the stored value and loyalty platform and the managed marketing services platform to contribute incremental revenue streams as they mature through the balance of the year. And on the wholesale side, the HERO wireless customer rollouts we have under contract are expected to begin during the second quarter with wholesale wireless revenue contribution anticipated to be reflected in third quarter 2026 results.

The Alpha Modus joint pilot is underway with integration for full market launch. SurgePays today is no longer a single product story. We are a fintech and mobile virtual network operator with multiple revenue channels, more than 200,000 wireless subscriber lines, a retail footprint of more than 9,000 convenience store locations, a customer acquisition engine that we own and operate in-house, signed wholesale wireless contracts on the HERO program and a multi-year commercial integration framework with Alpha Modus. Every consumer we acquire is now a multiproduct opportunity rather than a single product transaction. That is the model we have built. Q1 2026 is the first quarter where you can see it taking shape and the operating work we did during the quarter is what makes the rest of the year actionable. Operator, we are now ready to open the call for questions.

[Operator Instructions] Our first question is coming from Ed Woo with Ascendiant Capital.

Yes. Congratulations on the progress. Congratulations on getting to the 200,000 subscribers, do you -- what do you think the long-term subscriber target is? What is the market potential? And how happy would you be to reach a certain level?

Thanks for the question, Ed. That's a loaded question because unfortunately, with the psychotic entrepreneurial mindset that most of the folks on our team have, since we did come from this industry before the public company world. The number is always more. So that is one thing. As far as being happy and content are 2 different things. I think we'll be happy once we have surpassed the 1 million subscriber mark. I think that's just a subscriber mark that sets us apart and puts us in a special class that we've been shooting for. We've worked with companies in that arena. As you know, we have the third-party top-up platform. So we're familiar with those companies, familiar with the management of those companies and believe that we are as good as those companies and can pull that off, especially considering that we're not just looking for subscribers under one prepaid brand or under one subsidized brand.

And the fact that we can bring the wholesale piece as well, I think that you guys are going to be -- I think you're going to be pretty intrigued to see the numbers we can put up. And one of the decisions we've made, we learned last year that revenue for the sake of revenue isn't necessarily what the market is looking for. And sometimes, we've tried to do things to please the market instead of sticking to our business plan. And that's just part of, I guess, the wisdom of running a company and balancing the business of doing business versus the public side of the business. I think what you're going to see is the fact that we pulled back and we said, "Hey, you know what, instead of just scaling for the sake of scaling, let's reduce our costs, if not eliminate the cost to acquire a customer." Let's do all this work now, let's effectively increase our margins. Let's get this going to a point where we could scale and when we do scale, we'll get exponentially that much more customers where we can rinse and repeat with the profit from those customers and get that 1 million number faster.

But from an internal standpoint, Ed, 1 million is our number, and that would fall under the LinkUp and Torch Wireless brands, but we definitely want to push far beyond that. We see what's out there. We see the opportunities. And interestingly enough, with the subprime market continuing to grow, it's 138 million as of a brief that we've got on file last year. We feel like we can definitely go after a number that far exceeds that 1 million.

Great. And going back to -- you mentioned about the subprime market, it seems to be growing in this K-shaped economy. What are you hearing from the convenience store owners or the people that do business with them, are they able to benefit from the -- I hate to say it, but the [ poverty ] expanding or are people just being hurt all over.

I think that we have done -- and let me take a step back and let me use some of my -- we've been working inside the prepaid and subsidized market for over 20 years. Our best runs as a collection of former operators that are now working under one banner. Our best runs as companies, as entrepreneurs have always been at times when it's been most difficult financially. And I think that's for 2 reasons. Number one, if you provide a service that offers a value then in a situation where there's too much month, not enough check, I think that's where you can box out and gain ground. Number two, in that same situation where it's too much month, not enough check, I think people stop going through the motions of the ruts in the road of their daily life and they open their eyes a little bit wider for opportunities to save money. For example, you may have someone wait in line for 20 minutes to save $0.10 on gas.

Well, I mean, we -- instead of just paying my prepaid wireless bill that I've done for the past 1.5 years without even thinking, and I'm going to put $50 on the counter. Well, I just saw this poster. I just saw -- you got a smart TV over there by the coffee machine that says you guys have a $30 plan, and I know that, that encompasses what I use. And I can save $20 a month, and that means something to me when I'm working an hourly job. That's where I think the benefit comes in. And obviously, these convenience store owners -- the convenience stores nowadays in our -- the community markets that we work with. One of the reasons I love working with these people is they are -- the financial -- the transaction nucleus of these communities.

And so they're definitely going to have a beat on what's going on in the neighborhood and for them to be able to offer value. Look, that's that much more money that consumer is still going to spend inside that store, but they can buy other products as well.

Great. And I do wish you guys good luck.

Thanks, Ed.

[Operator Instructions] Okay. It looks like we currently have no further questions on the lines at this time. So this will conclude our question-and-answer session and also our call. You may disconnect your lines at this time. Have a wonderful day, and we thank you for your participation.

Greetings. Welcome to the SurgePays Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Valter Pinto, Investor Relations at SurgePays. You may begin.

Thank you, operator, and good afternoon, everyone. Welcome to the SurgePays 2025 Fourth Quarter and Full Year Financial Results Conference Call. Today's date is April 14, 2026. And on the call today from the company are Brian Cox, President and CEO; and Chelsea Pullano, Interim Chief Financial Officer.

Before we begin, I'd like to remind everyone that this call may contain forward-looking statements as they are defined under the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.

For a discussion of such risks and uncertainties, please see SurgePays' most recent filings with the SEC. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statements to reflect the events that occur after this call.

Copies of today's press release are accessible on SurgePays' Investor Relations website, ir.surgepays.com. And SurgePays' Form 10-K for the year ended December 31, 2025, will also be available on SurgePays' Investor Relations website.

And now I'd like to turn the call over to President and CEO, Brian Cox.

Thank you, Valter. Good afternoon, everyone, and thank you for joining us. Today, I will walk through our 2025 performance and what we proved operationally and how that directly translates into our outlook for 2026.

For the full year 2025, we generated approximately $57 million in revenue, including $16.2 million in the fourth quarter. As you review our results, it's important to understand the progression of the year. We saw steady growth from Q1 through Q3, with revenue increasing from approximately $10.6 million in Q1 to $11.5 million in Q2 and then reaching $18.7 million in Q3. That third quarter was an inflection point that demonstrated the scalability of our platform when capital is deployed into subscriber growth.

Q4 of 2025 is best understood in the context of what we demonstrated in Q3. In Q3, we deployed capital into subscriber acquisition and saw a clear step-function and increase in revenue. That quarter proved the scalability of our model when capital is applied.

In Q4, we made the decision to pull back on that level of spend and focus on capital discipline and efficiency. As a result, revenue in Q4 declined sequentially from Q3 but remained significantly higher than Q4 of 2024. That is the key point. We proved we can scale, and we demonstrated discipline in how we manage that growth. Just as importantly, Q4 included items that are not indicative of our current operating run rate, including legal and certain noncash expenses.

For the full year, total general and administrative expense declined to approximately $20.1 million from $27.5 million in 2024. That reduction reflects the cost actions we began taking as we exited the ACP period and repositioned the business.

At the same time, we continued to invest in the core infrastructure of the business, including our retail distribution network, our wireless platform and our digital acquisition capabilities. Today, we are not reliant on a single subsidized program. We have multiple revenue channels, including government-subsidized wireless, LinkUp Mobile prepaid, wholesale MVNE relationships and our point-of-sale fintech and data platforms. We believe that diversification fundamentally changes the quality and durability of our revenue. We are not demand constrained. We are capital disciplined. This leads directly into how we are thinking about 2026.

Many of our investors remember what occurred during the ACP period. We leveraged existing capital relationships to fund subscriber acquisition, and the result was revenue growth and meaningful stock appreciation. We are now executing a similar strategy but with a materially stronger foundation. We have multiple independent revenue streams. We have an established retail footprint of more than 9,000 locations. We have a customer acquisition engine through ProgramBenefits.com, and we have additional monetization layers, including wholesale and in-store media platforms. That combination should allow us to deploy capital into growth while also improving the underlying economics of the business.

Turning to the balance sheet. We ended 2025 with approximately $1.7 million in cash. Since year-end, we have taken additional actions to reduce our operating expense base and improve efficiency across the organization. Based on actions already taken, we estimate our current monthly cash burn at the end of Q1 2026 to be approximately $250,000 to $300,000. This is a meaningful shift from the cost structure exiting 2025 and reflects an even more disciplined operating model as we move forward in 2026.

The key takeaway is this. We have already demonstrated that when we deploy capital, we can scale revenue quickly. Now we are combining that capability with a more efficient cost structure and multiple revenue streams. We believe that positions us to drive growth in a more controlled and repeatable way.

With that, I will turn the call over to Chelsea to walk through the financials in more detail.

Thank you, Brian, and good afternoon, everyone. I'm honored to step into the role of Interim Chief Financial Officer at such an important time for SurgePays. I want to thank Brian and the Board for their confidence. I'm excited about the opportunity to help support the company's next phase of growth by strengthening financial discipline, improving transparency and helping drive our path towards profitability.

Now turning to the results. For the year ended December 31, 2025, total revenue was approximately $57 million compared to $60.9 million in 2024. The decrease was primarily driven by the expected decline in subsidized revenue following the expiration of the Affordable Connectivity Program in mid-2024.

Despite that, we saw strong performance in our point-of-sale and Prepaid Services segment, which increased by approximately $26.1 million year-over-year, partially offsetting the decline in MVNO revenue.

Cost of revenue for 2025 was approximately $67.6 million compared to $75.2 million in 2024. Gross loss improved to $10.6 million compared to $14.3 million in the prior year.

We expect continued improvement in gross margins as we scale higher-margin revenue streams and benefit from the cost structure already put in place.

Selling, general and administrative expense, excluding depreciation and amortization, declined to approximately $19.2 million from $26.3 million in 2024. This reflects reductions across multiple expense categories, including compensation, professional services and contractor expenses.

Net loss from operations was approximately $30.7 million compared to $41.8 million in 2024, representing a significant improvement year-over-year.

Net cash used in operating activities was approximately $21.3 million for 2025, reflecting the transition period following the end of ACP and the investments made to reposition the business.

Net cash provided by financing activities was approximately $10.5 million, primarily from the use of our at-the-market facility and additional capital raises during the year.

As Brian mentioned, we've taken meaningful actions since year-end to reduce our operating expenses, and we are seeing those improvements reflected in our current run rate as we move through the first quarter of 2026. It's important to note that in the fourth quarter, our SG&A included approximately $2.3 million of nonrecurring expenses, including legal costs and noncash items, which are not indicative of our ongoing operating expense run rate.

At December 31, 2025, we had a working capital deficit of approximately $16.2 million compared to a surplus of $11.8 million at the end of 2024. This reflects a shift in the business following the expiration of ACP and the timing of liabilities and capital deployment.

We continue to actively manage our liquidity and capital structure with a focus on supporting growth initiatives while maintaining financial discipline. Overall, 2025 was a transition year for the company. We repositioned the business, reduced operating expenses and established the foundation for a more diversified and scalable model. As we move into 2026, our focus is on executing against that foundation, improving margins and driving growth across our core revenue channels.

I will now turn the call back to Brian for closing remarks.

Appreciate it, Chelsea. I want to close with this. 2025 was about proving the model and resetting the foundation of the business. We demonstrated that when we deploy capital, we can scale revenue quickly. We also made the necessary adjustments to operate more efficiently and build a more durable business.

We are now moving forward in 2026 with multiple revenue streams, a significantly improved cost structure and a clear path to growth. We understand the market's concerns around capital and execution. Our focus is on showing, not telling. You will see that in how we manage expenses, how we deploy capital and how we grow the business. We believe we are positioned to execute, and we look forward to updating you on our progress throughout the year.

Thank you for your time and continued support. I will now pass it back to the operator for questions.

[Operator Instructions] Our first question comes from Ed Woo with Ascendiant Capital.

Congratulations on all the progress, Brian. I had a question. I know you're not giving out guidance, but what should we be most excited about of the various products you have that's going to be the biggest driver for revenue this year?

Ed, thanks for the question. I think as we look forward, interestingly enough, we've got the subsidized wireless. We've got LinkUp Mobile, and we've got some other kind of exciting things we've talked about that are going to start showing up on the financials.

If you had to pin me down right now, LinkUp Mobile is doing really well. Starting an MVNO, a prepaid wireless company from scratch, the team has done a phenomenal job. It's definitely a grind getting traction in the market. And keep in mind that while some of that is sold online, the majority of it is sold through dealerships and setting up relationships with dealers and sending out point-of-sale materials, getting SIM cards, training folks and then that store has your product and usually, let's say, 3 other prepaid companies as well. So that's a big deal for us, and it's staying power, and that's cash flow. And I think that's going to be the one that you'll start seeing some pretty significant numbers off of.

And there's some -- I think we've got some pretty exciting news coming up with LinkUp Mobile that I wish we had crossed a couple of thresholds before today, so we can talk about it today, but it will give us something to talk about in the upcoming months.

Great. And one last question I have is, you guys, like I said, serve the underserved markets through your convenience store operators. What are you hearing from these operators in terms of the economy is how are their customers? Are they doing better? Are they worse? Are they open to new products, et cetera?

I love this question. As you know, most of the folks on our team have been in this prepaid subprime, underserved, underbanked. There's a lot of words for it, and there's different scopes. The largest scope would be the subprime market. But our market at a time of where things are difficult and may be more expensive in the economy as they say, too much month, not enough check, there's always going to be a segment on the lower end of that socioeconomic that's not really affected. They're already lower income. It doesn't really hit them as much.

I mean when certain things -- your essential services are taken care of by the government, you're kind of below the water break line. If you think about the ocean where waves are crashing, the ups and downs, you're a little bit below that break line.

But what's interesting as we've expanded the scope of our company and our target market into the subprime market, we do push up into people that do spend money that do have money that don't specifically rely on the government who are getting squeezed. And I think what we're seeing, the ebbs and flows of all the folks on our team that we talk about this often, 20 years we've been doing this. And when times in the economy get a little difficult, that's when people take a step back and are more aware of their spending, more aware of value.

So we've always done the best and had our best runs when things in the economy were tough because that's when people will listen to you if you're offering a better value. Otherwise, it's just a rut in the road, I'm going to pay $40 a month for my wireless service because that's just what I do and I just pay it and I do it 2 20s on the countertop, boom. But when things are tough and putting 2 20s on the countertop at the convenience store kind of pulls a little bit more for me. It feels a little heavier when I lay it down. Well, then if I look over and say, "Hey, wait a minute, I got a company here that will give me the exact same thing for $30. What is that? Well, tell me about LinkUp."

So I think that it's actually an opportunity for us, and it opens people's eyes. They're looking up. They're aware of their finances. They're aware of other value. So -- and we look to capitalize on that. We never wish ill on the economy. But historically, we've done our best and had our best runs when there's -- I don't want to say blood on the street, that's not accurate, but when the economy is going through a difficult time.

[Operator Instructions] We have reached the end of the question-and-answer session. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Greetings. Welcome to the SurgePays Third Quarter 2025 Earnings Conference Call.

[Operator Instructions]

Please note, this conference is being recorded. I will now turn the conference over to your host, Valter Pinto, Investor Relations at SurgePays. You may begin.

Thank you, operator, and good afternoon, everyone. Welcome to the SurgePays 2025 Third Quarter Financial Results Conference Call. Today's date is November 12, 2025. And on the call today from the company are Brian Cox, President and CEO; and Tony Evers, Chief Financial Officer.

Before we begin, I'd like to remind everyone that this call may contain forward-looking statements as they are defined under the Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.

For a discussion of such risks and uncertainties, please see SurgePays' most recent filings with the SEC. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statements to reflect the events that occur after this call.

Copies of today's press release are accessible on SurgePays' Investor Relations website, ir.surgepays.com. In addition, SurgePays' Form 10-Q for the quarter ended September 30, 2025, will also be available on SurgePays' Investor Relations website. And now I'd like to turn the call over to President and CEO, 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's happening now and what's 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 are 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 third quarter of 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 0 in the third quarter of 2024 to $5.6 million in the third quarter of 2025 from our 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's even more exciting is that we're still operating well below our current capacity. Many sales channels are still being open, 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 30-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, which not only facilitates transactions, but also drives recurring revenue from activations and replenishments right at the convenience store register.

It's not just a tool, it's 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 locations operating on the SurgePays 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're one of the few with direct carrier access, putting us in a rare and powerful position.

To date, we've onboarded 3 MVNO partners. Collectively, these partners serve thousands of subscribers, and they're looking to grow quickly, providing us with a path to scale our platform and reoccurring revenue base.

In August, we had a successful show at All Wireless & Prepaid Expo with the expectation of onboarding and integrating new wholesale clients over the next 6 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 Corpay, a next-generation payment technology provider to integrate with our ClearLine marketing and customer engagement platform into Corpay's cloud-native payment processing solution.

This integration brings together 2 complementary technologies, point-of-sale payments and digital marketing automation, creating a first-of-its-kind capability that enables retailers to engage with customers from the moment of the transaction and beyond.

By embedding ClearLine's SaaS-based marketing tools directly into Corpay'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 is no longer building the foundation. The foundation is built. Now it's 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've proven we can move fast and with our diversified platform 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'll now turn it over to Tony for a detailed review of our Q3 financials. Tony?

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 the third quarter of 2024, driven by an increase in MVNO and point-of-sale and prepaid services revenue.

Gross profit loss narrowed to $2.6 million for the third quarter of 2025, compared to a gross profit loss of $7.8 million for the third quarter of 2024.

We expect the continued 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 the end of 2025 for this revenue channel.

As we continue to expand both subsidized Lifeline and nonsubsidized 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 the third quarter of 2025 as compared to $6.2 million for the third quarter of 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 the third quarter of 2025, compared to $14.3 million in the third quarter of 2024.

Our reported net loss and loss per share for the third quarter of 2025 were $7.5 million and negative $0.38 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.

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, LogicsIQ 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 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're 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 Instructions]

First question comes from Ed Woo with Ascendiant Capital.

Congratulations on all your progress that you're making. My question is on the consumer that you're targeting the underserved market that goes to a lot of these convenience stores.

What are you hearing from either the convenience stores owners of what they're seeing and whether this customer base is able to be receptive to these new products that you're introducing?

Thank you 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've seen over the past 25 years working with convenience stores.

At times when there's doubt and uncertainty, that's when people are more open to other values or other products -- or because now they're reconsidering the life of the rut in the road, they're looking for maybe different paths to make ends meet.

So we see this as a huge opportunity for us timing-wise. And we mentioned that the -- there's a research brief that just came out where the subprime market has ballooned from 100 million to 137 million, 138 million in the past 4 years. While that could be debated on the greatness for our country, for our company, it's 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's flip the -- keep in mind, we have end customers, 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're looking for other ways to provide service 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's looking for ways to make a couple of 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 2 things together, and it doesn't cost them a dime to launch products through his store. And keep in mind, he'll be able to take prepaid wireless payments for any carrier. He'll be able to do activations for our prepaid wireless and make a significant commission on that.

He'll be able to take payments on that. He'll be able to also -- anyone that comes in and uses that SNAP/EBT card, he can offer them a free wireless service and he'll get paid for that.

So he'll be able to provide those products to his community. And likewise, that foot traffic coming in will increase from the things he's providing his community.

So we see it as a win-win-win. We get access to more customers. The store owner increases his revenue and profits to providing more services and then the consumers who go in those stores who are now more aware and maybe not just in that rut in the road are going to be looking for other ways to save money and make ends meet.

That sounds good. And my last question is, there's been a little bit of consolidation with the major convenience store brands. Is that going to impact your business at all? And do you think that's going to be the future of, I guess, the convenience stores?

The convenience store market is an interesting one. It's almost a case study in business. The distributors, we've talked about this before, the distributors to convenience stores are usually second and third-generation companies, quite a few of them like your HT Hackney, [ Long ], McLane, you're talking about almost 100-year-old companies.

So the convenience store business, regardless of what sign is out on the gas pump or the coming and going of private equity or acquisition, at the end of the day, even 7-Elevens, it's 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 they have to do the 7-Eleven carry certain products, if you will. But there's still the autonomy and decision-making of that ultimate store owner who 9 times out of 10 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 don't know or don't remember, we're in the checking account.

We have -- it's not just something where people are signing a PO and sending us a check. We're actually integrated with them from a business perspective. We're pushing and pulling money based on commissions they make, based on [indiscernible] them.

So there is a pretty significant trust with that business owner. So we don't 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.

We have reached the end of the question-and-answer session.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.