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Sep 30, 2023
Gogo Q3 2023 Earnings Report
Announced third quarter results, updated 2023 financial guidance, and reiterated long-term targets.
Key Takeaways
Gogo Inc. reported a decrease in total revenue by 7% year-over-year, totaling $97.9 million, but achieved a record third quarter service revenue of $79.5 million, up 6% year-over-year. The company's net income increased by 4% to $20.9 million.
Total revenue decreased 7% year-over-year to $97.9 million.
Record service revenue increased 6% year-over-year to $79.5 million.
Net income increased 4% from Q3 2022, reaching $20.9 million.
Total ATG aircraft online reached 7,150, a 6% increase compared to Q3 2022.
Gogo
Gogo
Forward Guidance
Gogo anticipates revenue between $390 million and $400 million, with adjusted EBITDA at the higher end of the $150 million to $160 million range, and free cash flow also at the high end of its $60 million to $70 million guidance.
Positive Outlook
- Revenue growth at a compound annual growth rate of approximately 15%-17% from 2022 through 2027.
- Annual Adjusted EBITDA Margin in the mid-40% range by 2027.
- Free Cash Flow in the range of $150 million to $200 million in 2025, without the effect of the FCC Reimbursement program, and growing thereafter.
- The Company continues to expect that Gogo Galileo will contribute revenue beginning in 2025.
- Capital expenditures of $25 million to $30 million including $12 million for the Gogo 5G program and $2 million related to the FCC Reimbursement Program, versus prior guidance at the low end of $30 million to $40 million.
Challenges Ahead
- Total revenue in the range of $390 million to $400 million, versus prior guidance in the range of $410 million to $420 million, driven predominantly by lower equipment revenue.
- Adjusted EBITDA at the high end of the previously guided range of $150 million to $160 million reflecting operating expenses of approximately $15 million for strategic and operational initiatives including Gogo 5G, Gogo Galileo and the FCC Reimbursement Program.
- Free Cash Flow at the high end of the previously guided range of $60 million to $70 million which includes approximately $20 million of negative Free Cash Flow due to the expected lag of reimbursements tied to the FCC Reimbursement Program.
- Near-term revenue headwinds
- Two-year investment cycle launching Gogo 5G and Galileo