SURG - Earnings call transcript Q4 2023

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Operator

Good afternoon, everyone, and welcome to today's SurgePays' Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions]. Also today's call is being recorded, and I will be standing by should anyone need any assistance? And now at this time, I'll turn things over to Mr. [ Quinn Cullinan ], Investor Relations. Quinn, please go ahead.

Unknown Executive

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

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

discussion the uncertainties, please SEC. a see with such filings recent For risks of SurgePays' and most

to call. current All only, to undertake and reflect forward-looking that we statement obligation the after occur made statements events reflect this our expectations no any today update

are during the of on course X financial more of non-GAAP will SurgePays' call, these this are afternoon. directly measures. website, company most Investor today's measures release comparable in or Copies press accessible ir.surgepays.com. the non-GAAP the Also release of measures the Reconciliations press included financial we to issued Relations be discussing today's GAAP

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

Kevin Cox

while for patience all shareholders, especially our your by our our evolve. of I and Quinn. thanking start shareholders recent to Thanks, investors off want business long-term watching model

and pushing done results. recently, we our to growth and financial strategy team highs Simultaneously, that I our trend believe been delivering has our an outstanding want has executing job continue. management stock record record

that and more ever best $XX with the million about in financial I'll cash, over We're position explain later. in

Now results. for our

have and local the is mission Studies closest the populations convenience at live that to underbanked their most of transactions level underserved services Our at the trusted home. and financial the their and do financial where wireless shop. they shown underbanked to grassroots technology to prepaid core provide store

of the our We speak year income highest on themselves. are delivering was strides XXXX think primarily numbers highest making I $XX.X profitable to a and believe as the $XXX.X seen for we Gross most company's tremendous ever profit net in million. was the the history, seen Revenue for this $XX.X front, year $XX.X the the we've million, as million, EBITDA million, we've company. a company. highest of increased

ACP reduced flow significant the focus from a cash with excuse black enrollment the is transactions company for the time. tent the subscribers Our operations catalyst paid the Profitability most brick-and-mortar in cost on and from ACP the away for stores. subscribers the and we in our -- being into first increase was move as me,

about million in from $XX we Early XXXX, pulled line an credit. of down inventory

line off cash we As the we generated pay to utilized forecasted, year's flows end. internally by

period what deeply the in made Looking prior to worth running compelling or in sales during so we calls, transition during but the we store lot this did parking sales on that short-term a through counter the more transitioned slowdown online in-store it We've bit touched online XXXX, economics the from year. our sales of at force with the growth is well it. and

convenience We next check as stores to XXXX devices with servers early This tablets get services our of register touchscreen SurgePays stores towards our of in the control all out this transacting in marketing remotely. on an end customer-facing are customers Mobile enable will they to products working to integrated marketing acquired our and point-of-sale the these of their signed actively and network. and ultimately and with technology Clearline We the platform XXXX. the agreement and our real-time

give products our opens of suite competitors services, development feel the this us company, of of We technology, competitive combined LinkUp such terms is register the Mobile, will a verticals that of team our launch pack team. we're at separating the and with from prepaid support pursuing. growth our equipment in and aggressive Touchscreen several already advantage wireless own strategy

indirect in-house some the key distribution. made channels is and sales focus hires during and on We Our now building year.

Financial the growth we Technology. XXXX, has groundwork LinkUp Mobile of introduced leveraging has outside telecom fully big hired in Jeremy to of next Gary background Jeremy Gies, team platform. prepaid on Just who SurgePays, our Head Gary business, Assurance Jeremy's Revenue Chekan year. focusing tasked the XXXX We promoted for is been to Since was his time the for President the during laid SurgePays' at SurgePays. now with the integrated future extensive fintech as of contribution step. our was joining with prepare runway and and

and planted after XXXX. like growth XXXX seeds implemented during for in profitable the Additions these

As building team, focusing continue and sales direct our indirect on we leaders. we are

are our evaluating approach. opportunities We new constantly ensure they to fit strategic

a sheet, improved $XX.X We balance of entered the an million strong debt. with year cash in minimal balance over

January, further in million included fantastic a raise institutional equity sheet through since of have the new We successful balance which investors. some bolstered $XX

have to compares of our our on bank. balance adds over cash hand. XXXX to XXXX, $X.X well been where from million see line and had We minimal warrants cash raise exercised, million XXXX bottom $XX in also which to on indeed the being we happy the lost previous in

to turn some ] I'll to now profitability and SurgePays to company [ today's over summarizing our which results opportunities chest afforded call the maximize call. the tremendous Tony before review those Tony? financial has opportunities. award achieved

Anthony Evers

afternoon, financial fourth everyone. XXXX of quarter Thank my full and overview and begin I'll year good the results. you, Brian,

XX%. was which we increased and $XXX.X providing to XX% service mobile through million to in low-income revenues to broadband to increase due the XXXX. ACP, million increase For of $XXX.X related the revenues year, wireless $XXX.X XXXX, subscribers in to compared primarily million of an reported representing The

to compared year for million quarter Revenue increased million the ago $XX.X profit $XX.X XXXX. XXX% in the the $XX.X year of Gross the fourth in compared million totaled to $XX.X to in million period. quarter

million to compared increased to ago $X.X During in the XX% XXXX, $X.X gross quarter million year the of fourth profit period.

the Brian has had to in last talked SG&A the up of over XX.X% by consultant also contractor The the increased of year. and about as gross expenses, fees the increase driven showed fourth XX.X% course primarily quarter hires Fourth in and additional we expenses was compensation by quarter year-over-year. margin year. XX.X% XXXX versus improvement

Income million gain at a $X.XX compared the to from year in or operations $X.X was loss to $X.X $XX.X or loss income of a year year per the a positive of compared Net XXXX. share for million of $XX.X net in for period. million $X.XX the per million share ago was

than net Of included ago gain Centrecom. period the in year $XXX,XXX and investments in income, the $XX.X included million expense interest much a lower year on

and flow. sheet, liquidity Turning balance cash to the

of to balance ended was ago government $XXX,XXX after XX million XX days to a U.S. XXXX. million. $XX.X from the to compared have mobile and new verified million customer usually subsidy, year-end XX XXXX is occurs a approximately cash December receivable signed as up. year for the from Receivables $X.X by Our Comps payment increased $X -- year broadband

Subsequent to the in since million year-end, approximately our January of and in million raised X. exercising secondary from warrants $XX cash came offering $X.X

growth. Given maintaining structure, the our capital business position, focus strengthened investing for financial liquidity priorities cash balance and on future allocation our ample and in cash

for I'll now Brian? closing remarks. back call pass Brian to the

Kevin Cox

financial contrasted of made the the SurgePays solid country for in consistent growth. Thanks, now our earnings Tony. some sales some attractive on disposition significant industry. market economic We an destination and by believe has with best in cash footing This is SurgePays talent a uncertainty balance, and

and of We folks largest believe and are of products indirect relationships the networks distribution create adding market bring sales and with underbanked salespeople awaits. direct We and poised are and in-house country's vast monthly. to These networks growth them. a opportunity services opportunities tremendous of we with one

to hires acquisitions are opportunities our growth look and revenue synergistic increase model. organic sales, accretive that through and I business to key arise, as complementary

we can decisions make maximize and results positive and ratios management shows effective difficult flow. that cash record track produce deliver Our

our Our interests are aligned with shareholders.

much Thank you today. time for so your

to up open now call will the We questions.

Operator

first go to Tower this afternoon [Operator Water Instructions] Research. Curtis of Shauger We'll

Curtis Shauger

all, finish to great of the year. First

interesting points light It pretty for I like in quarter, is Some trending business good at ACP. like It looks controlled down, million guess, the a which of there. the trajectory the $XX finished wireless there. seems

we customers, taking business Mobile you that or delays issues event see we the ACP from what to ACP say continue they the stop that wireless transition to of about give in more see smooth funding light could In encouragement that can the can launch investors traditional some with new government? ClearLine a the

Kevin Cox

things don't game to have be have Curtis, are thank those to and the meets We definitely that question. on your in team respect contingencies is time hand. now to on my you over. as and lineup you all an audibles deck approach [ hands Yes, going know what for goes ACP, daily for have ] right you

of these factored all have definitely we So in.

because would power to spoken LinkUp our been of of focused allowed where brand any One has to Mobile through are significantly closest was where folks and shopping live ACP competition store things before, it offer achieve heavily and a we've that utilizing buying the other lower to we've of be as what the that out us there. on [indiscernible] than convenience the they

a know the fintech payments. ability for that ourselves, one there to essentially. we're company our a and only payments We're of to Every a because the take company companies actually, party wireless wireless only And that is out third reason company. transaction of of other we utilizes process company is the is

So register. the the at customer-facing where tablets comes point-of-sale ClearLine in, ClearLine

constantly Just color moving imagine promoting that ads X inches full products. our

XX, traffic in customer convenience volume prepaid and the customers. comes every targeted times convenience in, have you of that wireless community going when stores foot stores So these out of be to are X

of a that every save that the profit Again, is offering them opportunity their out to transactional of to there's make opportunity an That off on astounding. people coming owner, usually XXX in pretty money chance back customer and offer over owner-operator to behind wireless then month bills register, store million there.

as is ClearLine products would the in strongest. our where promote to looking we where to be for constantly to able always cater products So the change like piece the different products ads, ClearLine as that's handy rotators in in bring same comes and ability -- we're the group, we we're those to then again, will feel other high-margin people be other to putting that the stores

we the them we're products store. think it And deploying -- and of to sale legacy got R&R, we who that reengage Retrofit, stores, touched the out on now reps then calling that of I have them them ClearLine the our existing subset offer our got I point to we've right remind of stores. it, the let's support to and we I -- are And call a whole Rekindle get our remind these are, look, store, the the actively

don't especially We out and call, today's to revenue, XX, quick they we've stores that want for for And where more premarketing in which of be the call made shipped us. -- charge out day that's out hopped the I the already example, is that to hungry of store. on today for goods they're pocket great consumable for still a a don't That's We have on constantly I store want shelf. that. for before come

reposition stores we're continuing. very very we're So little getting to look receptive. the It's hopeful, Clearline downturn downturn, resources being to our is full And is of if well, being that to ACP, ACP finding used LinkUp support there going in currently case but POS to those there can and out well, stores. adopted in we and throttle a and forward we our with all sell Mobile

Operator

of now We Capital. Ascendiant Woo Ed go next to

Edward Woo

How of Yes. Congratulations on the end those touch business XXXX. issues. rough really said, that the economy your that is the is economic stores bases Like in macro these My customers, hurting you the like it more at with have seems and ladder. question customers? helping lower or your on your is performance the

Kevin Cox

question. your bit to you different than thank going answer the what I'm little question and Ed, a Yes. you use use. words for

because market times that receptive It's day an the benefit or people things making There's know are they a that awareness openness of that may for are motivating habits there's struggling the consciously upturns changing just and takes bit. a and are fine. would to a as because us little both and subconsciously they we provider in same from to bit normally people little beating when our any a downturns change of every doesn't now some necessarily an have wireless their route go through most

to group, but save not this pay closest convenient where if of whether if So a store of community, country our money go money, or it's to bill home. to can go almost save they now, products we this and X/X to have offer and to for will. it's their their only out services them their they way payment center, you don't it's

how obtain customer. can usually why to things. reasons, And couple number the look we for a and We long-term two, all then we check can secure the the as of number a it's boxes customer one, them

as two three, sure XXX is support about customers. offer is in make support pride price, to payment take first-class number that support before, center, amount and a then our talked working one and I our of proximity for tremendous number Number over there people we we've to

when not look think obtain it base. a that just target our the unique at and where now a I you base, have the ball, it's curve visit let me bit the customer a little clients store Remember, in throw So to perspective, we serve from of store. business model we who ultimately customers customer

way able on their environment, owners to in them So rates bottom line interest getting more stores they're the listening. are store who stores for of make have out to a of for offer fantastic shelf for already by maxed floor the help credit now be lines ceiling got goods squeezed type money the this these to to their and

As a -- cater now to our have our compelling because matter got suite booths stores conventions alone. -- sales we've X we've put fact, product in offering, a convenience at believe in of we really have got just teams, X April that we I together

openness. that owners So reception in. There's business to fantastic. folks the an getting, These it's on the products our hungry are these bring are outbound, hungry. definitely are we're People

know everybody they two, they Number sell. that one, of And it. wins will number off

been really a So deal. it's good

us -- people to or hit, conditions, who always to really But we want and like thrive stress, they So pray cater do does. for well. serving of I serve do tough usually I group financial never companies from and when hope nobody this again,

Operator

next We'll now go ] Instructions] Andrew SLS [Operator to Scott Group. [ with

Unknown Analyst

congratulations year. Brian, your to you great a and on team

everybody's way. of have watching little aftermarket. stock I'm guess head come do. to the got but bit long I scratcher, a something You turn It's guys the a in a

-- heard number any just And with you like much have what cash do How you go ideas on doing what over you right. lot do you think a I Can with? again, much options that sounds do have you guys now? the right I of carry on cash. plan you It

Kevin Cox

us the the have because cumulative for question. options do we Yes, of compounding cash And is month-over-month. thanks that cash. Andrew, profit of

raise In addition about to that Titan with the the we we January. talked in -- again, that did

had of to over the And shy X then had million NASDAQ, to just just warrants our X raise we've get of shy million from warrants exercised we've months. couple XXXX past

led So the in that's over bank. us cash having $XX million ultimately

of really, from that Washington what's sidelines, strategic I'm -- now, folks debating. standpoint to that are And in a more right of, a stuck in global guess, never little going ACP we're but going I items say Congress we're gotten call as lot the watching the bit it we're on sitting a -- behind for has the Washington important on you in funding

direction, our and in thumbs a anything. words assuming good giving consultants in step to up fully negative vibes, Our take legal a us that up. folks I are want don't But a all

put So growing gets the focus like of utilize to let's hard expect, to maybe arena touch business MVNO ACP funded and going we just out and couple the obviously core prepaid the that and hope pretty stores. those. And LinkUp. have ACP we're really together. wireless our and FinTech company, from profits our platform on a pushing model, we in convenience contingency on our push plans

businesses high own simple and distribution that pretty level. output, that companies to output there our depend us. If more think for could and control we profitable we really their we being third know that's it's plug -- lot profitable the out definitely doesn't, So there's a them products, push that take network on product get own accretive from and mechanism be companies into our it through sell that our distribution extremely would able of are to some parties that

given It over the we're right would But bit this later. weeks, see shake the the couple days little army now, at a have me dealing going we're see of with. I and that men least of out. to table things call XX see next how was more, kind on wait wish

way, adding look, ISOs we're companies sales merchant our door-to-door the same they're merchant selling -- very that But the we're sales ISO We're independent in development card -- that adding constantly folks, in other called still organizations, we're But taking. strategy similar the account to independent is constantly accounts salespeople. credit that go industry, model.

we're And that are in-house with also adding them. salespeople bringing networks

feedback something are getting the work we're great. for looking has conventions the a So getting great, who that is from lot of been for we're different salespeople feedback competitors from

us. we're So stay going going on to to on We're stay this.

Operator

that all Thank is you. gentlemen, have And afternoon. the this time we ladies and

today's bring will much a to conclusion like so joining and to Goodbye. afternoon, evening. us all of that all for call. you us wish we'd the this conference thank great So Again, you

SurgePays (SURG) 12 Mar 242023 Q4 Earnings call transcript