SURG - Earnings call transcript Q2 2022

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Operator

Good day, and welcome to the SurgePays, Inc.

Second Quarter 2022 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Brian Prenoveau. Please go ahead.

Brian Prenoveau

good and operator, you, afternoon, everyone. Thank the Conference Call. to SurgePays Second and Webcast Earnings XXXX Quarter Welcome Today's August and from SurgePays and date call Evers, are the is Tony Brian XX, XXXX, Cox, Financial President Chief Chief Officer; on Executive Officer. and today

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

to For and All events to measures. statement today's GAAP to most Relations forward-looking this SurgePays' non-GAAP these release call, are non-GAAP one occur of ir.surgepays.com. or the we current the of in this today's a more SEC. today update recent we on SurgePays' any measures accessible course most release website, after of be discussing press made and discussion obligation our reflect issued company afternoon. such Reconciliations uncertainties, of please the are that included call. no the the Copies financial press statements the reflect Also, expectations directly will risks filings financial during with Investor measure only, see comparable undertake

to SurgePays' Brian over In on call website. Relations Investor like Cox. for will quarter the turn Form now the also addition, And Chief XX-Q SurgePays' be and ended June available Executive to XXXX, I'd President XX, Officer,

Brian Cox

translating trajectory strategic just to but The earlier Brian. of this quarter, team hard with second the of a which this not quarter for path XXX% were year, year. growth, that revenue increase million out in is last compared in is laid the growth busy a work the direction. $XX line the we with Thanks, and the growth Revenue second year. is We tremendously to exceeded

subscribers company the Affordable even we making, thrilled announced where excited future. Connectivity Last month, business in the mobile So we more we've through about can broadband progress with eclipsed go been our the that XXX,XXX but in we're Program. had the

XXX,XXX to is be to is significant XXX,XXX to opportunity long-term to program from our picture that's Our This Growth a for of exceed. subscribers time that, of continues and target for we nice but by which we strategic provide long-term screws households. speak XXXX, while business. the million ACP vary, we're access growth year take available But our end the that analyze fine-tune broadband to program. eligible how to the I growing Internet decision-making room we'll linear, XX The necessary. this more want and need where I us. goal say XX we are there's all for our and to business big customers, beyond the in million operations, believe and tirelessly about we minded and tighten to Estimates the the progress are anywhere households and working and believe to affordable performance never believe was low-income operate

some driving in our users our data usage we higher up recent noticed of were example, an analysis, As costs. average that

can of users So to plan, drive us. allow which around wholesale that use should plan, new now ensure our $XX We us no our we to costs, to back would the to beyond month. pushing heavy user negotiated went to hedge By back per which cost carriers. cost could per average a this down $XX we month

are cash year that managing our cash build as business from manner $X.X to in second where current the us the been opportunity subscribers, add provides We're XX At impact us. The with be the quarter, acquisition acquisition the $X.X we've June $X.X is of million the get of of would XX, at we we're end to long-term compared had a million only this I'd better second an to includes steadily first that's looking available quickly the increased end this possible. the $X.X highest cash as to where Where in $X.X final opportunity. in per made Wireless. million area successful We're immediate this to for receivable cash estimates roughly month. much for of the states. end of cash quarter to $XXX,XXX payments end million the like of been One savings the throughout used the to not to we cash level presented and offer still the quarter. simply to Our of show the believe, looking first that's subscriber as paramount at with the target. has end best flow, Wireless, and where believe, if of Torch and a of a to million we growth program XXXX been, cash quarter. gauge XXXX, at could have that deploying SurgePhone assets and total Recall at possible. were licensed look we on Torch buy tablets the that Accounts at maximize the

the a states program up also we additional XX of the wireless has Torch acquisition of now subscribers as With Wireless, certain licensed states online. in Torch can carrier can well. and being benefit ramp all the lifeline significantly offer in

and the houses second management, addition client the connected on subscribers manages we that purchased database The service wireless to we for And and house. is for customer as the subscriber plans platform or FCC's relationship managing per business. information, been clearing using a also this increased, billing in CRM with quarter, increased. metering, central customer basis. integrated were nervous We system costs the expensed a had Wireless, is compliance, Torch software service, to a our our CRM, carriers, In wireless as underlying

how main rebranded outright the CRM will is other it subscribers demonstrate to be to the buy cash expense used annual for next company. the XXX,XXX the at to goals subscribers. revenue visiting platform quarter. to the ACP few it buy decision provides currently CRM the to the years, at made revenue opportunities and for can to as and the growth revenue have up high-margin lifeline company. That's has believe our check over because as been our cheaper tablets, companies our used out does been opportunity the parties can using The million and than of out provide has thinking Wireless another of ShockWave up SurgePays, wanted be The we stream to system for highlight strategic what buy X but interested to these purchase the second I about the isn't licensed shockwavecrm.com. ancillary Looking excited and the business. The this X numbers companies be the overall CRM focus other to business. doubly well our shockwavecrm.com. nice This to and Software-as-a-Service XXX,XXX sign subscribers it pump and easily system could Torch by now source would team internal more We're about potential it and to be of for CRM ShockWave, and

thinking. and payoff CRM to short-term road. that's buy our far greater a the cash provide In Torch the believe we analysis, down However, the used

costs, efficiently. XX can ACP We base while really a We states. grow manage rate. We can more lower continue we have customer impressive our all base at the believe all ability to our offer in subscriber to

simple line. the opportunities the we We've in believe credit, forward, We need U.S. dilution. the government Yes, the discussed Going of with obtaining longer wireless to our easiest this financing ramp significant with and created financing opportunities. equity raise. backed management than balance the less team cash strain the flow growth receivable, to more over various are on was us growth probably by to a we line time cash route past, continue for has close will allow the provided receivables a and a more period of and subscriber not a

more also We're I'm we've we how and accomplish short can diluting a the of results it been we in made amount excited be company, results. much the our fund money base think float where Nasdaq. are same learning is starting as when our can frame achieve. to all much extremely and while each able I progress of it keeping essentially more in how demonstrated be is the and we've that proud accelerating. longer worth hard on of financial to work we month. the was growth couldn't as a about listed but more However, subscriber as and shareholders not time honestly Revenue raise more time we to about growth the

further. did disposal X fund growth the and more tools than drive growth to have even months to at today X ago or we We cash our more

for been ACP underbanked we of services before, do call complement us can overlooked to a for a the that said The corporations. initiative broadband profit, and mobile annual services that a afford great but uniquely access take provides not licensed to profitable reach services products we offer this $X by growth in our these providing goal this and want that I've been could As with granted. we to to underbanked program to growing that households to underserved believe haven't previously communities. is revenue have and and We underserved still of believe existing valuable Internet addressed. positioned on adequately long, so success is provider business providing financial most We are and by larger because best obviously, communities of it. have invaluable in a by gauge these communities perfect government billion to also Being sales

to accretive better customers. call. We that the summarizing provide call Tony are or results and to serve has now organically over to a the the turn financial through before today's operating brief I'll our grow Tony? a ability of business review acquisitions

Tony Evers

of Brian, good will financial quarter's you, the I Thank everyone. overview second by and begin results. afternoon,

in the second increase quarter, our second as driven million to last discussed. growth the $XX primarily million expenses million quarter attributable quarter in quarter was compared second quarter the the Brian $XXX,XXX the of loss increased loss XXXX. net representing from to subscriber of share The has $X.X mobile we loss largely Net XX% of second in a period. or operations XX% premiums. increased business, professional $X.XX XXXX, Gross with from was revenues $X.X For $XXX,XXX broadband -- to share or million a million XXXX in the by quarter of increase costs of for an of loss quarter and $XXX,XXX November narrowed associated of of ago second up the the the insurance This the in fees company's compared last year. Nasdaq year loss to SG&A made year's move $X.X -- a to to of the quarter. largely in a in second other quarter the to a loss $XX.X per compared Loss quarter insurance of XXX%. primarily compared per was second in second to of $X.XX profit in reported or

The liabilities. from of second in items, XXXX nonrecurring including of benefited from several a the a change $XXX,XXX value benefit fair quarter

a settlement had XXXX. $XXX,XXX $X.X of and benefit in of debt quarter million also on discount, second We gain amortization from liabilities of the a all

breakeven. X to close quarter was EBITDA For XXXX, a of $XX,XXX loss

Turning to and flow. sheet, cash the balance liquidity

new has to $X.X Our million XX mentioned, Accounts is XX compared the over for of cash occurs government mobile is of from days $X subsidy. Payment balance, usually million was subscriber to signed a Brian broadband increased million wireless The as as million. June the at increased receivable verified $X.X and after the up. approximately receivable U.S. to $X.X as end XX customer has XXXX. growth by

mentioned CRM Brian the payment made his $XXX,XXX in to remarks, of complete $XXX,XXX and payments system. As Torch we the acquisition for Wireless cash briefly

growth. structure, Given maintaining focused allocation pass balance financial for now and some the back closing ample are on higher cash I investing the our business for to strengthened future liquidity Brian? Brian position, priorities call in remarks capital our will cash and

Brian Cox

Tony. Thanks,

a to reinvest financial home, We've growth communities in services in is at hard revenue a and our where this accessible. of tremendous North is aren't show mobile how Star The financial do how we we to growth starting we in households around demonstrated stores huge company shop. has profitability in our cornering with local and the If potential. With is gain towards broadband As We generating they believe building cash. can is the trending done essential our that reach communities the more our wireless team increase we to results. organization the work geographic and cash, where to really more successful market readily they company, are and tap provides into and the the their both improve market underbank local business a overall the will successfully, company. subscribers, performance access

as quarter making as We possible. rosy aren't focused look each on

We customer the X, to about us, be the the We couldn't to a our our term shareholders, sharing employees are opportunities at X with ahead be partners. base can company thinking and forward down road this and I ability within more excited we where employees to revenue streams longer X, are years this expand market. of significantly thank all about the and want progress looking SurgePays. with larger

I greatly Lastly, of of interest the support growth. our continue we journey as and appreciate shareholders this

call to Operator? questions. We will now up open the

Operator

[Operator come with Maxim will from Group. our question Instructions] first Diana And Michael

Michael Diana

but and to ACP. you've know XX potentially talked eligible So you all not previous this continuing And growing year households to mentioned for XX next certainly million grow investor million about year. I conferences at just

these next that still years now? X potential are or from confidence you be gives what year to subscribers there going So

Brian Cox

What and salespeople people -- intersect the there's corner the lets up at Thanks, need. And word. most these that -- out is and know, we our tents into and where communities the there think have that gives when a that an we that the areas what me line confidence folks it's the that product I of a that run don't go fact around just we the the wash me devices, think over these and of the these I Michael. we I cliche to go underserved set question. we want there's kind demand of obviously, I want to the see and appreciate tent When need. into wraps until

And who to So that's other There's and to are it a run. online now of a surfing to like, bit group of folks, little I pages of say, going see we've are of existing House paying for I low-income comes markets customers, get that that of already service. web to their know be for companies there's that necessarily think lot a access how who White going are on going when services to large to. to discount more elderly think people example, the a to White just House what think millions neighborhoods would mobile hit synergistic be home find referring don't in different folks are a you're I targeting these I the broadband.

existing have a a cable it's advantage, also market to trying where of believe home we base doesn't pass are, we're our more just these way, discounts that and set again, and customer actually to up and the home, call where we to get, and believe and it in communities, our that's And wired Most us. -- but on I transient. that a I Internet. it's fact don't the think little I So we not roll go our We sleeves that how go there bit broadband cornering big into competitive to customers. already we -- -- that's by want is fixed using company we up, our that's our

I a there's uptick. significant there. some referenced -- such So I in points And believe of that as my my that's why

things like way. done -- look could can we had out can we is avoid the we've dollars back second of, ShockWave. at introspective saved to The of now This talked million and If are costs What would an such back. do going as incremental what see model. X.X was million that okay, we quarter this this quarter a subscribers, buying are it to look some -- of I I we what what hey, today, I this work. would not couple the we have on is mean, we're about proved do

a in we once to start -- XXX,XXX got of equipped parts subscribers finally sample because So also that's in really diving the geographically large coast-to-coast not the same we and are enough country. customer really patterns different what usage

put do from numbers way in what we to out definitely, make that maximize profit that's me the we've we -- each can can some so subscriber. we've far that the So but a this gives of belief exceeds that about there, the which talked

Michael Diana

what you a Okay. ways And on said. just based and little asked different

that doing? think exactly there I many, there companies other any, saying you're doing So you're what if out aren't

Brian Cox

you're to always do. think be to -- going I there's companies anytime people that successful, there's going you mimicking be I what mean,

and the of what's a Those of The have are apartment are do the are the your because they're house. the not more do companies who who scale larger call it, that to a interesting, to I the we I like are we like going it think traditional not line really in fixed capitalized are. attempting us are to be do larger same are broadband, side in wireless we companies capitalized the wire fixed to of able that be the or going go modem house the it way companies capitalized at the fixed, companies.

the a if and there a that reports which from So devices, frontline only, boxed service we SIM which our rarely, glaze that street. the very you doing wireless which do are folks, we few on bump the we out is competitors get we we or other just -- the out. companies that. out tablet, or, put into let's very I the rarely ever, then And we say, don't see over this quite -- ever is get -- way have want is These are that of to back

also to We have tablet an hotspot. be XX-inch as X-inch used and it a tablet, can X-

hoping see put have the going that in only, card Some larger doing to that and could SIM that and that tablet get other we'll an of are route. their I you in use they at the is to and tablet instant $XXX gratification if hand, then SIM think so, already away tablet market that Internet. always They're that with tablet a wireless access I not simply customer. somebody this companies get market. could folks valued or walk to that's the a believe Anytime

Operator

Ed Ascendiant And Woo the next Capital. from question will come with

Ed Woo

on growth. that, with the into My some uncertain the actually business Congratulations is, environment? environment, do your economic or and your helps Yes. the weakening quarter business question that think on you we head as hurts macro

Brian Cox

Thanks, that services we that it It's provide potential Ed, never times question. how not it gas But service. essential always to on prices to from I things to the carefully pool who does our are people. hard the anyone. that for wish asked we've obviously, need that I qualifying I because our, increases what the status the believe of for one. because I And you, want help it's interesting want our -- company. it That's our what economy, let's increasing is, the a definitely obviously built people navigate and lot. That's customer have get it, to down here, an national just socioeconomic the seen inflation, call it's dropping adds have way of as and numbers some the -- people into

careful to always folks. for help how sound but folks. a beneficiary, So it's say to I rather, us those want be I it I times opportunity the to don't on gives want tough

of the I it's numbers there don't very this for it of doesn't know the you is the some -- So diapers potential make many how a are the programs. undocumented formula, And the children in dialed create pool. immigrants of the that see program, you. under for It's number before. that to few that this hindrance. people I qualify about my government an customer where a can definitely -- program undocumented. that what a WIC don't in one of government perfect immigrants. our of to talked we've W-I-C. WIC, It's -- qualify -- their one and it have It's out the program sure looking that I as there's only at immigrant, there baby one have communication program, potential which Likewise, can challenges difficult mean, the that are of increases pinpoint

you on you're qualify this for if program. So WIC,

that having think we potential for what the I to be to But country think and personal the a the than it opinion I my why immigrants think discussed the more I bit little increases the so is an opportunity I that call. folks. celebrate But greater reason more more into one of on is difficulty, is pull. come folks us it for that's even help our market -- the yes, customer don't want that, that again, may but So

Ed Woo

are the then impact last Well, is longer And -- know longer-term possibly on especially then that inflation. guys question give. business appreciative product supply of I chain Any definitely customers that more your my supply and getting your term, tablets? you on

Brian Cox

same get there's question. as today is kind Ed, asked glad the that that to I'm we we're the I we about the always Find looking actually of at tightening obviously on to I things tell way screws of there's because going that this more to Find attain that dropping into so we're -- ways more you guys. sweat wasn't talked can keep drops my already make tomorrow. screws ways tight. the money

flowing guys allow $XX One $XX We're price being the numbers and and the from have purchasing of about going I why buy credit then -- purchasing at reasons those receivables that's running you -- getting global internally, tablet. we available it's a most to raise that out numbers and a call the we're tablets do seeing products we them run sourcing, this always -- But one never we're sales. what's redline is I company achieve of obtaining to And type hitting hit capital cash because too to we're because more in on If right those to and of soon. we growth. and too we're basically We what very dilute is hit the anywhere and I it's and for, our month. the advance. excited the more we're doing and careful sometimes, capital reason then market just out willing be fast to was available to and tablets that our be based this you're line in of of for going couldn't is us why big of the expensive just-in-time of

using us to tablets in can our So affect with all. get it less won't for chain get have capital, tablets I put wait to to $XX, in can actually then to money order the for no, with sound I difference. price supply we having It is to doesn't buy the a a yesterday those I XX,XXX tablet, much tomorrow, I a and $XX -- made that's can and huge. when -- if access time a an a saving at today, like because significant not XX,XXX, to ability will deposit doesn't which $XX but don't I do us XX,XXX, I'm enhance can look closer see $XX because because just to It that's you're looking at month,

again, a as So beneficiary we're long.

money pay is and that as we upfront next don't that need the And tablets As actually I us helping we've I that get money wait relationships the out. those our month, can and we tomorrow leveraged long distributors. with chain and supply as can think

about XX,XXX of these call call a lot who guys of asked company do a is me you, from smaller. that Michael you we if are some companies a the We do from buying call buying companies. X,XXX I'm tablets smaller the make. the tablets first are model other Well, A first. month you and the

tablets don't of run tablets So chain. X supply we're that that tablets we because month. hit out allocation of our out reason max run willing -- we've to purchase that's We we've of for because of

Ed Woo

luck. good guys you wish I and great, Sounds

Brian Cox

Ed. Thanks,

Operator

over or the any And additional conference for now you that I'll remarks. closing to turn session. conclude does the Thank question-and-answer you. back

Brian Prenoveau

joining everybody, for today. you, us Thank

You disconnect. can now

SurgePays (SURG) 13 Aug 222022 Q2 Earnings call transcript