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Gogo Inc. (NASDAQ: GOGO) is the world's largest provider of broadband connectivity services for the business aviation market. Headquartered in Broomfield, Colorado, Gogo offers a robust suite of smart cabin systems that integrate connectivity, in-flight entertainment, and voice solutions. These services are installed on thousands of business aircraft, ranging from turboprops to the largest global jets.
Gogo's business model primarily operates through two revenue streams: service revenue and equipment revenue. Service revenue comprises monthly subscription and usage fees paid by aircraft owners and operators for telecommunication, data, and in-flight entertainment services. On the other hand, equipment revenue stems from the sale of Air-to-Ground (ATG) and narrowband satellite connectivity equipment, recognized when control of the equipment is transferred to Original Equipment Manufacturers (OEMs) and dealers.
Gogo has recently made significant strides in its 5G program. The AVANCE LX5 has received Supplemental Type Certification (STC) and Parts Manufacturer Approval (PMA) from the Federal Aviation Administration (FAA). This approval paves the way for customer installations of the LX5, which is expected to deliver approximately 25 Mbps on average, with peak speeds reaching 75-80 Mbps. Moreover, Gogo's collaboration with NetJets will enable the upgrade of their U.S. and European fleets to Gogo's AVANCE L5, Gogo 5G, and Galileo, the company's Low Earth Orbit (LEO) broadband satellite service.
In the legal domain, Gogo recently secured a favorable ruling from the United States Court of Appeals for the Federal Circuit, which upheld a previous judgment denying SmartSky Networks' motion for a preliminary injunction against Gogo's 5G product. This enables Gogo to continue its operations without disruption.
Financially, Gogo has demonstrated consistent growth. As of March 31, 2024, Gogo reported 7,136 business aircraft flying with its broadband ATG systems onboard, 4,110 of which are equipped with a Gogo AVANCE L5 or L3 system, and 4,285 aircraft with narrowband satellite connectivity installed. The company’s strategic investments are expected to yield substantial free cash flow in the coming years, especially with the forthcoming launches of Gogo 5G and Galileo.
Gogo's commitment to innovation is further evidenced by its state-of-the-art virtual flight simulator, which accelerates the development of its 5G software. Additionally, Gogo Galileo has achieved end-to-end connectivity using the HDX antenna on the Eutelsat OneWeb LEO satellite network, positioning it for a commercial launch later this year.
Gogo's extensive network of authorized dealers, partnerships with leading OEMs, and robust technological advancements ensure that it remains at the forefront of the business aviation connectivity market. Whether it's through providing reliable Wi-Fi for business travelers or enhancing in-flight entertainment options, Gogo continues to deliver exceptional value to its customers and stakeholders.
Gogo's AVANCE L3 inflight connectivity system is now installed on over 500 business aircraft, emphasizing its growing importance in aviation connectivity. Launched in January 2018, the AVANCE L3 has been on more than 120,000 flights and nearly 700 systems have been shipped. The system caters to smaller aircraft with customizable connectivity options, allowing users to stay connected via email and voice calls. Demand for inflight connectivity has surged, especially during the pandemic, positioning the AVANCE L3 as a necessary travel tool.
Gogo (NASDAQ: GOGO) has launched Gogo Vision 360, a premium inflight entertainment (IFE) service for business aviation. This service, available via the AVANCE 4.2 software update, allows unlimited streaming of movies, TV shows, and news at a fixed monthly price, simplifying costs associated with inflight media. The service features a new 3D moving map developed in partnership with FlightPath3D, which enhances the passenger experience with interactive flight information. Gogo Vision 360 has packages starting from $849 per month, with current users nearing 900 active subscribers.
On December 1, 2020, Gogo announced the successful sale of its Commercial Aviation business to Intelsat for $400 million in cash. This transaction strengthens Gogo's financial position, reducing net debt and enabling investment in growth opportunities like Gogo 5G. Post-sale, Gogo has about $460 million in cash and $770 million in net debt. The company plans a comprehensive refinancing by May 2021 to align its balance sheet and reduce interest expenses. Gogo remains focused on the business aviation market, leveraging its ATG network and proprietary spectrum.
Gogo (NASDAQ: GOGO) reported Q3 2020 results with total revenue of $66.5 million, down 18% year-over-year but up 22% sequentially. The company incurred a net loss of $8.9 million and had Adjusted EBITDA of $30.2 million. Notably, the Commercial Aviation segment revenue is now categorized as discontinued operations. Cash and cash equivalents decreased to $117.5 million. Gogo continues to prepare for the sale of its Commercial Aviation division to Intelsat, expected to close by Q1 2021, which aims to improve liquidity and reduce debt.
Gogo Inc. (NASDAQ: GOGO) announced it will release its third quarter 2020 financial results on November 9, 2020, before the market opens. The company will hold a conference call at 8:30 a.m. ET on the same day to discuss the results with financial analysts. Gogo provides broadband connectivity products for aviation, serving numerous commercial airlines and private aircraft globally. The conference call details can be accessed via the company's Investor Relations website.
Gogo Business Aviation announced that its AVANCE L3 system has been selected as a factory option for new Beechcraft King Air 360/360ER aircraft. This milestone strengthens their long-standing partnership with Textron Aviation. The King Air 360 will feature enhanced inflight connectivity and entertainment, allowing users to connect at lower altitudes. Deliveries are set to begin shortly. The AVANCE L3 offers customizable Wi-Fi solutions, enabling email, messaging, and access to entertainment, and is designed for smaller jets and turboprops.
Gogo Inc. (NASDAQ: GOGO) announced on September 23, 2020, that its Board of Directors has adopted a Section 382 Rights Plan aimed at protecting its net operating loss carryforwards (NOLs) and tax assets, totaling approximately $580 million in federal NOLs, $430 million in state NOLs, and $196 million in federal interest expense carryforwards. This Plan will issue one Right for each common stock share outstanding as of October 2, 2020, and it requires stockholder approval at Gogo's 2021 annual meeting.
Gogo Business Aviation (NASDAQ: GOGO) announced on September 18, 2020, that the U.S. Patent and Trademark Office declined to review U.S. Patent No. 9,312,947 owned by SmartSky Networks, LLC. Gogo disagrees with this decision, asserting they do not infringe any valid patent. They emphasized that this outcome does not hinder their growth, including the launch of Gogo 5G, which aims to strengthen their market position in business aviation. Currently, Gogo's systems operate on over 5,500 business jets, showcasing their extensive customer base.
Pilatus has chosen Gogo (NASDAQ: GOGO) to provide its AVANCE L3 Wi-Fi system as a factory option for the new PC-24 aircraft. This follows the successful integration of the system in the PC-12 NGX. The AVANCE L3 offers customizable inflight connectivity and entertainment features, enhancing the passenger experience. Gogo's vice president emphasized the collaboration with Pilatus signifies a strong partnership, aiming to meet the demand for in-flight connectivity in smaller business jets. This strategic move positions Gogo favorably within the aviation sector.
Gogo Inc. (NASDAQ: GOGO) announced that GTCR, a private equity firm, has acquired a 14.8% stake in the company. Gogo's management expressed enthusiasm for GTCR's investment, anticipating a constructive collaboration to execute their strategic plan. GTCR's Managing Director emphasized Gogo's focus on its business aviation segment, suggesting potential for growth following the planned sale of its commercial aviation business. Gogo aims to lead in aviation broadband connectivity, offering customized internet solutions for business and commercial airlines.
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