Gogo (NASDAQ:GOGO) Announces Earnings Results

Key Points

• Gogo missed quarterly estimates: It reported a loss of $0.02 per share versus the $0.01 loss analysts expected, while revenue of $213.23 million was below forecasts and down 4.6% year over year.
• Galileo adoption accelerated, with record shipments and a 61% sequential increase in aircraft online. However, lower high-margin legacy ATG service revenue and lower-margin Galileo equipment pressured results; Gogo maintained its full-year revenue and adjusted EBITDA guidance.
• Cash flow and debt maturity improved: Quarterly free cash flow rose to $28.1 million from $21.6 million in Q2, and an amended term loan extends consenting lenders’ maturities to October 2030.

Gogo (NASDAQ:GOGO - Get Free Report) posted its quarterly earnings results on Friday. The technology company reported ($0.02) EPS for the quarter, missing the consensus estimate of ($0.01) by ($0.01), Briefing.com reports. The business had revenue of $213.23 million for the quarter, compared to analysts' expectations of $216.52 million. Gogo had a positive return on equity of 22.55% and a negative net margin of 0.09%. The company's revenue was down 4.6% compared to the same quarter last year. During the same period last year, the business posted ($0.01) earnings per share.

Here are the key takeaways from Gogo's conference call:

• Galileo adoption accelerated: Record shipments of 172 units and a 61% sequential increase in aircraft online were accompanied by major fleet commitments, including PlaneSense and Textron. Management said the qualified pipeline remains above 500 aircraft and expects service revenue to benefit from both new activations and rising revenue per aircraft as introductory discounts expire.
• The legacy ATG transition pressured results. Third-quarter revenue fell 5% year over year to $213.2 million, while adjusted EBITDA declined 27% to $41 million, primarily because of lower, high-margin ATG service revenue; Galileo equipment also carries lower margins than the hardware it replaces. Gogo reiterated full-year guidance of $870 million-$895 million in revenue and $175 million-$185 million in adjusted EBITDA.
• Gogo extended its debt runway and generated higher sequential free cash flow. The amended term loan extends consenting lenders’ maturities to October 2030 and includes $75 million of committed principal payments through 2027; quarterly free cash flow was $28.1 million, up from $21.6 million in Q2.
• Military and government remained a growth driver: Service revenue rose 36% year over year to $37.2 million, though it eased from a record second quarter. The company also highlighted UAV connectivity tests and new mission applications as potential avenues for expansion.
• Gogo is exploring ways to unlock value from its spectrum and tower assets. The FCC renewed its exclusive 800 MHz spectrum license for 10 years, and the company is working with advisors to assess potential uses in aviation, UAVs, and terrestrial or direct-to-device communications; no transaction or valuation was announced.

Gogo Trading Up 70.9%

Gogo stock traded up $1.61 during mid-day trading on Friday, reaching $3.88. 28,783,324 shares of the company traded hands, compared to its average volume of 2,002,927. The company has a debt-to-equity ratio of 6.74, a current ratio of 1.73 and a quick ratio of 1.21. The firm's 50 day moving average price is $2.37 and its 200 day moving average price is $3.62. The firm has a market capitalization of $525.78 million, a price-to-earnings ratio of 388.00 and a beta of 1.26. Gogo has a 52-week low of $1.96 and a 52-week high of $7.94.

Analyst Upgrades and Downgrades

A number of equities research analysts have recently weighed in on the company. Zacks Research raised Gogo from a "strong sell" rating to a "hold" rating in a research note on Monday, October 5th. Wall Street Zen lowered shares of Gogo from a "hold" rating to a "sell" rating in a report on Saturday, October 24th. Roth Capital reaffirmed a "buy" rating on shares of Gogo in a research note on Friday, August 7th. Finally, Weiss Ratings lowered shares of Gogo from a "hold (c-)" rating to a "sell (d)" rating in a report on Monday, August 17th. One analyst has rated the stock with a Buy rating, three have given a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the company has a consensus rating of "Hold" and an average target price of $8.50.

Gogo Company Profile

Gogo Inc is an aviation connectivity and broadband services company that provides internet access, entertainment, and communications solutions for business and commercial aircraft. Its offerings are designed to help passengers and flight crews stay connected while in the air through a combination of air-to-ground and satellite-based technologies.

Gogo's business aviation portfolio includes the AVANCE connectivity platform, which supports in-flight Wi-Fi and related services, as well as equipment, software, and network management solutions for private and business aircraft.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.