Gogo (NASDAQ:GOGO) Posts Quarterly Earnings Results, Misses Expectations By $0.01 EPS

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

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 Price Performance

Shares of NASDAQ:GOGO traded up $1.61 during midday trading on Friday, reaching $3.88. The company’s stock had a trading volume of 28,783,324 shares, compared to its average volume of 1,610,832. The business’s fifty day simple moving average is $2.40 and its 200-day simple moving average is $3.62. The company has a debt-to-equity ratio of 6.74, a current ratio of 1.73 and a quick ratio of 1.21. Gogo has a fifty-two week low of $1.96 and a fifty-two week high of $7.94. The company has a market capitalization of $525.78 million, a P/E ratio of 388.00 and a beta of 1.26.

Wall Street Analyst Weigh In

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