Galileo shipments hit record at Gogo, but revenue slips
The company also unveiled a Galileo roadmap with upgrades roughly every 24 months over the next six years.
Business aviation connectivity provider Gogo’s shift from the air-to-ground connectivity to low Earth orbit (LEO) satellite service is beginning to show in the numbers. The company reported record third-quarter shipments off its Galileo LEO terminal.
On the results, CEO Chris Moore said: “reflect meaningful progress in Gogo’s transformation from a domestic provider of ATG connectivity into a global provider of high-speed LEO and GEO satellite connectivity to the business aviation and mil/gov markets.”
The earnings announcement showed shrinking ATG revenue dragged on revenue and profit during the quarter as total revenue fell 5% to $213.2m from $223.6 a year earlier.
Breakdown showed service revenue declined by 4% to $182.7m with equipment revenue shrinking 9% to $30.5m. Business aviation service revenue dropped 10% to $145.6m.
Gogo management blamed the lower ATG service revenue, which carries the company’s highest margins. Adjusted EBITDA declined 27% to $41.0m from $56.2m a year earlier, and 24% from $53.7m in the second quarter.
Gross margin before depreciation and amortisation was about 40%, against 42% in the second quarter. The net loss widened to $3.2m from $1.9m. This included a $6.1m non-cash increase in the fair value of the Satcom Direct earn-out liability.
CFO Zac Cotner said Galileo hardware carries lower margins than the ATG equipment it replaces, with “several fleet orders aggressively priced to secure long-term duration service revenue”.
The company shipped a record 172 Galileo units, an increase of 95% year-over-year and 59% compared to the second quarter of 2023. Aircraft online rose 61% on the second quarter to 297. Average monthly service revenue per Galileo aircraft rose 6% on the second quarter as launch discounts expire. The qualified pipeline is still above 500 aircraft, said the company.
“Each aircraft that activates represents a 7- to 10-year recurring revenue relationship,” Moore said.
The company booked orders from several operators and OEMs. This includes Textron Aviation equipping its new Latitude and Longitude jets delivered from 2028 with Galileo HDX as standard. Other orders came from PlaneSense, Bombardier, Duncan Aviation and TransMedics.
The company also unveiled a Galileo roadmap with upgrades roughly every 24 months over the next six years. The company is targeting five times current download speeds and ten times upload speeds. It added four HDX supplemental type certificates and one for FDX, bringing the total to 54.
On the ATG front, the number of aircraft online with the service fell 17% to 5,399 and 6% on the second quarter, and ATG equipment sales fell 68% to 142 units. Gogo 5G ended with 94 aircraft online.
During the quarter, Gogo also amended and extended its roughly $600m Term Loan B moving maturity from April 2028 to October 2030.
Free cash flow at the end of the quarter was $28.1m, against $30.6m a year earlier and $21.6m in the second quarter. Cash ended at $90.7m, up $27.6m on the second quarter.
Gogo kept its 2026 guidance intact with revenue of $870m to $895m, about 84% from service, adjusted EBITDA of $175m to $185m and free cash flow of $65m to $85m.
