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Jun 30, 2024
Gogo Q2 2024 Earnings Report
Announced second quarter results with total revenue down 1% year-over-year but record service revenue up 4% year-over-year.
Key Takeaways
Gogo Inc. reported a slight decrease in total revenue, but an increase in service revenue. Net income decreased significantly due to an unrealized loss related to a convertible note investment and a prior-year tax benefit. The company updated its 2024 guidance and long-term financial targets, including revenue, Adjusted EBITDA, and Free Cash Flow.
Total revenue of $102.1 million decreased slightly compared to Q2 2023.
Record service revenue of $81.9 million increased 4% compared to Q2 2023.
Net income of $0.8 million decreased 99% from $89.8 million in Q2 2023.
Free Cash Flow of $24.9 million increased from $13.3 million in the prior-year period.
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Gogo Revenue by Segment
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CapyFin.comRevenue by Geographic Location
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CapyFin.com Forward Guidance
The company updated its 2024 guidance and long-term financial targets. Total revenue is expected to be in the range of $400 million to $410 million. Free Cash Flow is expected to be in the range of $35 million to $55 million, which includes $40 million in reimbursements tied to the FCC Reimbursement Program.
Positive Outlook
- Adjusted EBITDA at the high end of the range of $110 million to $125 million.
- Free Cash Flow in the range of $35 million to $55 million.
- Capital expenditures of approximately $35 million.
- Reiterate revenue growth at a compound annual growth rate of approximately 15%-17% from 2023 through 2028.
- Reiterate Annual Adjusted EBITDA Margin reaching 40% in 2028.
Challenges Ahead
- Total revenue in the range of $400 million to $410 million versus prior guidance of $410 million to $425 million.
- Adjusted EBITDA reflects increased legal expenses and approximately $26 million of operating expenses for strategic and operational initiatives including Gogo 5G and Gogo Galileo.
- Capital expenditures include $20 million for strategic initiatives including Gogo 5G, Gogo Galileo and the LTE network build, versus prior guidance of $45 million which included $30 million for strategic initiatives.
- Free Cash Flow targeting approximately $150 million in 2025, versus prior target of $150 million to $200 million, without the effect of the FCC Reimbursement Program.
- Ongoing delay and the risk of future delays in deploying 5G, and our ability to develop and deploy Gogo 5G, Gogo Galileo or other next generation technologies