Surge Holdings Inc (OTCQB:SURG) announced Wednesday that 2019 revenue increased by 69% as it expects even faster growth in 2020.
“While the 69% increase in sales for 2019 is clear confirmation of our accomplishments, our true progress was marked by the dramatic transformation of the business, as we laid the foundation for accelerated growth in 2020,” said CEO Brian Cox in a statement.
In its fourth quarter, which ended December 31, he said Surge Holdings generated $13.4 million in sales, “which puts us at a revenue run rate of more than $50 million at year-end” 2020.
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For the 12 months of 2019, revenue increased to about $25.7 million, compared to about $15.2 million in 2018.
Revenue associated with its SurgePays Marketplace increased more than three-fold to $4.2 million and revenue from Surge Logics subsidiary jumped 18-fold to $7.2 million. Also, the company banked $10.7 million in new revenue via the 4Q acquisition of prepaid wireless company ECS.
“Heading into 2020, we expect each of these business lines will continue to be significant contributors to our growth,” Cox said.
With the addition of 9,800 ECS retail locations to our network, he said Surge Holdings has a significant opportunity to cross-sell additional products to these stores.
The company’s products include its newly launched Loco Rabbit Brand “Grab-n-Go” phones and other targeted consumer products. It also believes that such demand will help drive further growth in the SurgePays Marketplace Network, which provides products to the underbanked through convenience stores, bodegas and community markets.
Cox also noted that in 2019 the Memphis-based company invested heavily in software development, infrastructure, and new initiatives, which temporarily impacted its profitability. It also added key members to its management team — Tony Evers as CFO and Tod Farnan as national sales director for SurgePays.
“We look forward to seeing all these initiatives take hold in 2020, with the expectation of driving meaningful increases in both revenues and cash flow,” Cox said.
“We will also be looking at additional strategic acquisitions to bolster our network and prepaid wireless base. I am more encouraged than ever in the outlook for our business and look forward to reporting our first-quarter results in the coming weeks.”
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