Gogo reports mixed Q2 results, eyes new product launch in H2 2024

Business aviation broadband connectivity services provider Gogo released financial results for the second quarter ended June 30, 2024 reporting mixed results with record service revenue offset by declining equipment sales and a significant drop in net income.

Total revenue for the quarter came in at $102.1m, slightly down from the previous quarter but still representing a 4% increase in service revenue year-over-year.

Key revenue highlight for Gogo in the second quarter was the growth of its AVANCE product line, which now accounts for approximately 60% of total aircraft online (AOL). The company also reported a record average monthly revenue per aircraft online (ARPU) of $3,468.

However, the company’s bottom line was impacted by a $11m after-tax unrealised loss on a convertible note investment, resulting in a net income of just $0.8m for the quarter. This compares to $89.8m in the same period last year. Adjusted EBITDA also declined by 31% year-over-year to $30.4m.

“Our second quarter results highlighted record service revenue and strong free cash flow of nearly $25m,” said Jessi Betjemann, executive vice president and CFO at Gogo.

The company is gearing up for the launch of several new products, including Gogo Galileo HDX in the fourth quarter of 2024 and Galileo FDX and Gogo 5G in 2025. The company expects these products to significantly expand its addressable market and drive future growth.

“Channel excitement and momentum continues to build ahead of our expected launches of Gogo Galileo HDX in the fourth quarter of 2024, and Galileo FDX and Gogo 5G in 2025,” said Oakleigh Thorne, Chairman and CEO. “These products will expand our global total addressable market by 60%, provide a step-change improvement in performance for our customers, and reignite Gogo’s growth trajectory.”

Gogo also provided updated financial guidance for 2024, including a slight reduction in revenue expectations but reaffirming its adjusted EBITDA and free cash flow targets. The company is targeting approximately $150m in free cash flow in 2025, driven by the launch of new products and reduced strategic investments.

Overall, Gogo’s second quarter results were a mixed bag, with strong top-line growth offset by challenges on the bottom line.