Gogo (GOGO) Q1 2025 Earnings Call May 09, 2025 08:30 AM ET Speaker0 Good day and thank you for standing by. Welcome to the Q1 twenty twenty five Gogo, Inc. Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 1, 1 again. Please be advised that today's conference is being recorded. I would no ...

Total Revenue of $230.3 million, up 121% Year-over-Year; First Quarter Service Revenue of $198.6 million, up 143% Year-over-Year Q1 Net Income of $12.0 million; Adjusted EBITDA(1) of $62.1 million Achieved PMA approval for FDX, Gogo Galileo's larger LEO antenna 59 HDX shipments year to date Reiterates 2025 Financial Guidance, which includes current impact of global tariffs BROOMFIELD, Colo., May 09, 2025 (GLOBE NEWSWIRE) -- Gogo Inc. (NASDAQ: GOGO) (“Gogo” or the “Company”), a leading global provider of br ...

Core Insights - Gogo has successfully demonstrated the performance of its Gogo Plane Simple® Electronically Steered Antenna (ESA) through extensive flight tests, indicating strong commercial potential for the technology [1][4][7] Group 1: Flight Testing and Performance - The ESA underwent rigorous testing in collaboration with MAG Aerospace, showcasing its ability to maintain continuous operations during various flight maneuvers, including taxi, take-off, landing, and complex patterns [1][2] - The antenna maintained stable connections with the satellite network, supporting multi-device connectivity for applications such as streaming, video conferencing, and corporate VPN access [2][4] Group 2: Technical Specifications and Development - The ESA is being developed in partnership with Gilat Satellite Networks Ltd, aimed at meeting the needs of VVIP and government operators by leveraging the Eutelsat OneWeb constellation [2][4] - The modular design of the ESA allows for easy upgrades to new antenna technologies without costly recertification, making it compatible with various aircraft types [3][4] Group 3: Future Prospects and Market Introduction - The successful flight tests have paved the way for the ESA's market introduction, with manufacturing of pre-production hardware already underway to support FAA testing and network-type approval [4][5] - Gogo's CEO highlighted the antenna's multi-purpose capabilities and its contribution to the company's expanding portfolio of connectivity solutions [4][7]

Financial Data and Key Metrics Changes - Gogo's total revenue for Q4 2024 was $137.8 million, representing a 41% year-over-year increase and a 37% sequential increase [40] - Total service revenue reached $119 million, up 47% year-over-year and 45% sequentially, primarily due to the addition of Satcom Direct [41] - Gogo reported a net loss of $28.2 million compared to a net income of $14.2 million in Q4 2023, largely due to $46.8 million in acquisition-related expenses [49] Business Line Data and Key Metrics Changes - The number of advanced aircraft online grew to 4,608, a 16% year-over-year increase, comprising 65% of the total ATG fleet [41] - Gogo achieved record ARPU of $3,500, reflecting a 3% year-over-year increase [42] - Equipment revenue for Q4 was $19 million, up 12% year-over-year, largely due to December results from Satcom Direct [43] Market Data and Key Metrics Changes - Global flight departures increased by 33% in February 2025 compared to February 2019, indicating a post-COVID surge in flight demand [9] - Demand for connectivity in business aviation is surging, with only 36% of the world's business jets having broadband in-flight connectivity [9] Company Strategy and Development Direction - Gogo aims to enhance its connectivity services through a multi-year investment program, focusing on new satellite technologies and a 5G ATG network [11] - The company plans to grow its addressable market by 60% and extend recurring revenue customer lifetimes through its Avance platform [11] - Gogo's strategy includes solidifying its position as a trusted provider in aviation connectivity by offering multi-band and multi-orbit capabilities [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the competitive landscape, highlighting Gogo's unique position as the only competitor to Starlink with a LEO solution designed for the business aviation market [15] - The company expects 2026 to be a significant inflection point for free cash flow, driven by higher-margin service revenue from new products [14] - Management acknowledged that while the delay in HDX PMA will impact financials in 2025, strong revenue growth is anticipated in subsequent years [35] Other Important Information - Gogo received $334 million in grants from the FCC to support the upgrade of its network, which is expected to enhance free cash flow projections for 2026 [31] - The company achieved $18 million in run-rate synergies at the close of the Satcom Direct acquisition and expects to exceed the targeted range of $25 million to $30 million in synergies within two years [50] Q&A Session Summary Question: How does Gogo view the competitive landscape? - Management believes Gogo is in a strong position due to its multi-orbit capability, which is essential for business aviation customers flying globally [63][65] Question: What are the implications of the brewing pushback against Starlink? - Management sees an opportunity for Gogo as sovereign nations seek regulatory compliant communication networks, which Gogo can provide [66] Question: When can investors expect long-term financial targets? - Management is considering whether to provide updates during the Q1 call or at an Investor Day, with a timeline of four to six weeks for more information [72] Question: What is Gogo's perspective on direct-to-device satellite connectivity? - Management emphasizes that Gogo focuses on true broadband capabilities for aircraft, which is more advanced than simple voice connectivity [74][78]