Gogo NASDAQ: GOGO reported second-quarter 2026 revenue of $222.8 million, down 1% from a year earlier and 2% from the first quarter, as growth in military and government connectivity services and next-generation products offset pressure in its legacy air-to-ground business.
Service revenue totaled $191.3 million, down 1% year over year but up 2% sequentially. Equipment revenue was $31.5 million, down 2% from the prior-year period and 18% from the first quarter, which Chief Financial Officer Zach Cotner attributed to lower AVANCE and C1 shipments following an unusually strong first quarter.
The company reported a net loss of $2 million, compared with net income of $12.8 million in the second quarter of 2025 and $13.1 million in the first quarter. Results included a $7.2 million non-cash increase in the fair value of the Satcom Direct earn-out liability. Adjusted EBITDA was $53.7 million, down 13% year over year and up 1% sequentially. Gross margin improved to 42% from 41% in the first quarter.
Military and government demand supports service revenue
Military and government service revenue rose 40% year over year and 20% sequentially, driven by increased demand and utilization, particularly amid the conflict in the Middle East, Chief Executive Officer Chris Moore said.
Moore said Gogo’s existing blanket purchase agreements allow the company to recognize additional revenue as usage increases without requiring new procurement cycles. He also described the segment as a source of contracted, longer-duration revenue that is less tied to business aviation cycles.
“Governments around the world continue to make long-term commitments to modernize their secure airborne communications infrastructure,” Moore said.
The company is also evaluating applications for its air-to-ground and satellite networks in unmanned aerial vehicles. Moore said Gogo already serves some drone projects through its GEO platform and is conducting product development and proof-of-concept work involving Galileo, LTE and 5G offerings. He added that Gogo is a main contract holder on Golden Dome, though he did not provide financial expectations for the drone opportunity.
Galileo and 5G adoption accelerates
Gogo continued to expand its Gogo Galileo low-Earth-orbit connectivity platform during the quarter. The company shipped 108 Galileo units, bringing cumulative terminal shipments to 518, a 17% sequential increase. Galileo aircraft online rose 66% from the prior quarter to 184.
Gogo added Airshare as a Galileo HDX fleet customer. Airshare is equipping its Embraer Phenom 300 fleet with the service after a demonstration flight in which the system transferred more than 16 GB of data in an hour across 23 connected devices, according to Moore.
The company also received certifications for Galileo HDX installations on Gulfstream G650 and G650ER aircraft, Falcon 7X and 8X aircraft, and the Pilatus PC-12 for government, defense and special-mission use. Moore said the approvals support a line-fit ramp expected in the second half, although several key supplemental type certificates remain outstanding.
Gogo sold 138 5G units during the quarter, compared with 52 in the first quarter. It also shipped 83 C1 systems and ended the quarter with 690 C1 systems online, up 24% sequentially.
Management said the pace of Galileo FDX certifications and the process of integrating products at original equipment manufacturers have delayed some equipment shipments. Moore said approximately 20 FDX certifications remain outstanding, particularly for mid- and large-cabin aircraft, with timing affected by an FAA backlog.
Legacy ATG transitions weigh on aircraft online figures
Total air-to-ground aircraft online declined 15% year over year and 6% sequentially to 5,731. Management said the decrease reflected previously discussed NetJets fleet transitions as well as customers deactivating legacy service while upgrading to Galileo or 5G.
Gogo ended the period with 4,603 AVANCE units online, a slight sequential decline. The company said it has about 400 remaining legacy ATG Classic customers that have not converted to C1 or upgraded to AVANCE, and expects some of that base to deactivate over time.
Chief Financial Officer Zach Cotner said the company expects about 1,200 total ATG units to roll off during 2026, including 5G units. Excluding NetJets deactivations and upgrades to newer Gogo products, he said the underlying deactivation rate was broadly flat with the first quarter.
Broadband GEO aircraft online was stable sequentially at 1,306 and down 1% year over year. Cotner said GEO performance has improved as operators invest in incremental capacity, and Gogo sold nearly 50 GEO units in the first half. The company still expects a modest decline in GEO units online, primarily due to aircraft sales rather than customers discontinuing service.
Guidance revised as litigation and equipment timing affect outlook
Gogo lowered its full-year 2026 outlook, now forecasting total revenue of $870 million to $895 million. The company expects approximately 84% of revenue to come from services and 16% from equipment.
- Adjusted EBITDA is expected to be $175 million to $185 million, including about $5 million of strategic investments and $22 million of litigation expense.
- Free cash flow is expected to be $65 million to $85 million.
- Net capital expenditures are still projected at about $20 million, assuming $45 million in FCC reimbursements.
Cotner said the revenue revision was primarily driven by timing of Galileo and 5G equipment shipments. Service revenue expectations were “essentially unchanged,” with military and government and GEO revenue offsetting softer-than-expected ATG service revenue. Higher litigation expense accounted for about half of the reduction in adjusted EBITDA guidance, he said.
The company generated $32.3 million in operating cash flow and $21.6 million in free cash flow during the quarter, compared with negative operating cash flow and free cash flow in the first quarter. Gogo ended the period with $63.1 million in cash after making a $21.1 million principal payment on its HPS term loan and funding a previously announced $40 million Satcom Direct earn-out payment. Its net leverage ratio was 3.8 times, and management reiterated a longer-term target of 2.5 to 3.5 times leverage.
About Gogo (NASDAQ:GOGO)
Gogo Inc is a leading provider of in-flight connectivity and entertainment solutions for commercial and business aviation. The company specializes in delivering broadband internet, voice and text services, and streaming entertainment to passengers at 35,000 feet. Gogo's offerings include both air-to-ground (ATG) networks and satellite-based connectivity, enabling reliable in-flight internet access across a range of aircraft types.
Gogo's ATG network spans the United States and portions of Canada, using ground towers to transmit data signals directly to equipped aircraft.
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