The 51% revenue growth story is undermined by structurally negative gross margins and $10.6M in convertible debt with only $2M cash. Monitor Q2 for whether cost-of-revenue improves after the in-house acquisition transition fully ramps and whether the 200K subscriber base starts generating positive contribution margin. Any equity or convertible issuance to fund operations would be deeply dilutive at sub-$1 share price.
Price Chart
Executive Summary
SurgePays reported Q1 2026 revenue of $16.0M (+51% YoY) but a net loss of $-12.1M (EPS -$0.51) that sharply missed the $-0.19 consensus. The 51% revenue growth and 25% G&A reduction are offset by a gross loss (cost of revenue exceeds revenue by $7.7M), massive interest expense from 2025 debt, and an accumulated deficit of $109M against only $2M cash. At a $13M market cap, the path to profitability is unclear despite operational milestones (200K+ subs, in-house acquisition engine).
Key Financial Metrics
Key Facts
- Q1 2026 revenue $15,983,983 vs $10,577,429 YoY (+51%)
- Q1 2026 net loss -$12,050,883, EPS -$0.51 vs consensus -$0.19 (168% miss)
- Gross loss of $7.7M: cost of revenue $23.7M on $16.0M revenue
- Cash & equivalents $1.99M; total cash + restricted $2.4M
- Total liabilities $33.4M vs total assets $9.5M — stockholder deficit -$23.9M
- Accumulated deficit grew to $109.0M from $96.9M end of 2025
- Interest expense $0.9M (10x YoY), convertible notes $10.6M net
- Total wireless subscriber lines surpassed 200,000
- G&A declined 25% YoY to $3.5M
- Operating cash burn improved to $4.6M from $7.0M YoY
- Net cash provided by financing was $5.0M (debt-driven), cash barely flat
Financial Impact
Net loss per share -$0.51 missed consensus -$0.19 by 168%; negative gross margin on revenue with heavy debt service costs
Risk Factors
- Negative gross margin (cost of revenue $7.7M above revenue) is structurally unsustainable — any growth amplifies the cash burn unless pricing or unit economics change
- Only $2M cash against $33.4M total liabilities including $10.6M in convertible notes — severe liquidity risk
- $0.51/share quarterly loss at a $13M market cap implies an annualized earnings yield of -157% — extreme dilution risk if financing is needed
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001493152-26-024589 |
| Exhibit: ex99-2.htm | 0001493152-26-024589 |
| Document: form8-k.htm | 0001493152-26-024589 |
| Document: 0001493152-26-024589-index-headers.html | 0001493152-26-024589 |
| Document: 0001493152-26-024589-index.html | 0001493152-26-024589 |
| Document: 0001493152-26-024589.txt | 0001493152-26-024589 |
| 8-K Data (Synthetic) | 0001493152-26-024589 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 3, 2026 29d ago | 8-K | $0.1650 $0.1466 | ▼ −11.15% | ▼ −9.96% | $0.1470 (−10.91%) |
Aug 14, 2026 7w ago | Press Release | $0.2820 $0.1601 | ▼ −43.23% | ▼ −41.24% | $0.1470 (−47.87%) |
Jul 29, 2026 9w ago | Press Release | $0.2350 $0.1742 | ▼ −25.87% | ▼ −30.89% | $0.1470 (−37.45%) |
Jul 29, 2026 9w ago | 8-K | $0.2350 $0.1742 | ▼ −25.87% | ▼ −30.89% | $0.1470 (−37.45%) |
Jun 5, 2026 17w ago | Press Release | $0.4700 $0.4612 | ▼ −1.87% | ▼ −3.73% | $0.1470 (−68.72%) |
May 20, 2026 19w ago | 8-K | $0.5000 $0.4204 | ▲ +15.92% | ▲ +16.66% | $0.1470 (+70.60%) |
May 11, 2026 20w ago | Press Release | $0.5590 $0.5000 | ▲ +10.55% | ▲ +10.25% | $0.1470 (+73.70%) |
Apr 16, 2026 24w ago | 8-K | $0.6620 $0.5720 | ▲ +13.60% | ▲ +18.97% | $0.1470 (+77.79%) |
Apr 14, 2026 24w ago | Press Release | $0.5500 $0.5440 | ▲ +1.09% | ▲ +7.13% | $0.1470 (+73.27%) |
US Market Status
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