GICS Sector : Communication Services
Gogo Inc., through its subsidiaries, provides broadband connectivity services to the aviation industry in the United States and internationally.It operates through Commercial Aviation North America (CA-NA), Commercial Aviation Rest of World (CA-ROW), and Business Aviation (BA) segments.The company design, build and operate air-to-ground networks, engineer and maintain in-flight systems of proprietary hardware and software, and deliver customizable connectivity and wireless entertainment services.
Gogo's financial performance in Q3 2025 was marked by total revenue of $224 million, down 1% on a pro forma basis year-over-year, with total service revenue of $190 million increasing 132% over the prior year and declining 2% sequentially. The company's adjusted EBITDA was $56.2 million, with an adjusted EBITDA margin of 25%. Earnings per share (EPS) came in at $0.1, slightly below estimates of $0.11. The company's service gross margin was 52%, in line with budget, with service gross profit accounting for 97% of total Q3 gross profit.
Publication Date: Nov -24
The company made significant progress with its new products, including 5G, HDX, and FDX, which are expected to provide a step function increase in speed, consistency, and performance. The VistaJet contract is a powerful endorsement for Galileo, with plans to deploy HDX and FDX across its fleet of 270 aircraft. Gogo's Galileo pipeline is approximately 1,000, up from 500 at the end of Q2. The company has also shipped over 200 HDX units year-to-date and expects a significant ramp in shipments and AOL growth in 2026 and beyond.
Gogo is reiterating its 2025 financial guidance, expecting total revenue at the high end of the range of $870 million to $910 million, adjusted EBITDA at the high end of the range of $200 million to $220 million, and free cash flow at the high end of the range of $60 million to $90 million. The company expects to return to modest year-over-year revenue growth in Q4, with analysts estimating next year's revenue growth at 1.9%. Gogo's net leverage ratio was 3.1x, down from 3.2x in the prior quarter, and the company generated $31 million of free cash flow in Q3, above expectations.
With a P/E Ratio of 129.86, P/B Ratio of 9.18, and EV/EBITDA of 16.37, the market is pricing in significant growth expectations for Gogo. The company's ROE is 9.44%, and ROIC is 3.89%, indicating a relatively efficient use of capital. The net debt to EBITDA ratio is 7.55, which is relatively high, but the company's free cash flow yield is 3.97%, providing some comfort. As Gogo continues to transition to its new products and technologies, investors will be watching closely to see if the company can deliver on its growth promises.
AXQ Capital LP Has $291,000 Stock Holdings in Gogo Inc. $GOGO
Nov -25
Gogo Inc. (GOGO) Q3 2025 Earnings Call Transcript
Nov -06
Here's What Key Metrics Tell Us About Gogo (GOGO) Q3 Earnings
Nov -06
Gogo (GOGO) Surpasses Q3 Earnings and Revenue Estimates
Nov -06
Gogo (GOGO) Expected to Announce Earnings on Thursday
Oct -30
Hughes and Gogo Celebrate Key FDX and HDX Aviation ESA Milestones
Oct -13
Gogo is flying high at NBAA with Gogo Galileo HDX and FDX STCs confirmed, more than 150 HDX antennas shipped, and flight testing of Gogo 5G ATG service planned.
Oct -13
Gogo announces first Gogo Galileo FDX STC as ALOFT AeroArchitects receives approval covering Boeing Business Jet BBJ737-series aircraft.
Oct -06
Gogo Inc.'s 12% growth is driven by increasing demand for in-flight connectivity, expansion into new markets, and partnerships with major airlines. The rise of remote work and digital entertainment also fuels growth. Additionally, Gogo's investments in 5G technology and its proprietary modem have improved network performance, attracting more customers and increasing revenue.
Gogo's Air-To-Ground segment growth is driven by increasing demand for in-flight connectivity, expansion of 2Ku satellite technology, and growing adoption of streaming services. Additionally, partnerships with major airlines, such as Delta and American Airlines, contribute to the segment's growth. Furthermore, the increasing need for high-speed internet and rising passenger traffic also support the 10% growth rate.
Gogo's Narrowband Satellite growth is driven by increasing demand for in-flight connectivity, expansion into new markets, and partnerships with major airlines. The growth is also fueled by the rising adoption of IoT devices, increasing need for remote monitoring and management, and the requirement for low-bandwidth, low-cost satellite connectivity solutions.
Gogo Inc.'s 'Other' segment growth is driven by increasing demand for in-flight entertainment and connectivity services, expansion into new markets, and strategic partnerships with airlines and content providers. Additionally, the company's investments in digital transformation and innovation, such as its Gogo 2Ku satellite technology, are contributing to its growth.
Gogo Inc.'s Entertainment and Other segment growth of 11% is driven by increasing demand for in-flight entertainment, expansion of streaming services, and growing adoption of digital content. Additionally, partnerships with major airlines and content providers, as well as investments in technology and infrastructure, contribute to the segment's growth.
Gogo's inflight internet provides high-speed internet access to passengers on commercial airlines, allowing them to stay connected and productive during flight.
Gogo's inflight entertainment offers a wide range of movies, TV shows, music, and games to passengers on commercial airlines, providing an immersive entertainment experience.
Gogo Vision is a wireless in-flight entertainment system that allows passengers to stream content to their devices, offering a personalized entertainment experience.
Gogo TV is a live TV service that offers passengers real-time access to live TV channels, news, and sports during flight.
Gogo's business aviation solutions provide high-speed internet and voice services to business aircraft, enabling passengers to stay connected and productive during flight.
Gogo's 2Ku is a high-speed satellite internet system that provides fast and reliable internet connectivity to commercial airlines and business aircraft.
Gogo Inc. faces moderate threat from substitutes as there are limited alternatives to in-flight internet services, but passengers may choose to use their personal hotspots or wait until they land to access the internet.
Gogo Inc. has a large customer base of airlines, which reduces the bargaining power of individual customers. Additionally, the company's contracts with airlines are typically long-term, reducing the risk of customers switching to competitors.
Gogo Inc. relies on a limited number of suppliers for its equipment and services, which gives them some bargaining power. However, the company's large scale of operations and long-term contracts mitigate this risk.
The threat of new entrants is low due to the high barriers to entry in the in-flight internet services market, including the need for significant capital investment and regulatory approvals.
The in-flight internet services market is highly competitive, with several players competing for market share. Gogo Inc. faces intense competition from companies like ViaSat and Panasonic Avionics.
| Value | |
|---|---|
| Debt Weight | 93.69% |
| Debt Cost | 3.95% |
| Equity Weight | 6.31% |
| Equity Cost | 9.16% |
| WACC | 4.27% |
| Leverage | 1485.67% |
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