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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 Business Aviation (NASDAQ: GOGO) has successfully completed the construction of its seven-tower 5G testbed by December 31, 2021, on time and within budget. This testbed will facilitate testing for Gogo's upcoming nationwide 150-tower network, aimed to be launched in the second half of 2022. The Gogo 5G service is projected to deliver average speeds of 25 Mbps with peaks reaching up to 80 Mbps. Additionally, the company announced Duncan Aviation is working on certifications for the onboard 5G system, with strong demand noted from its OEM partners.
Gogo Business Aviation's AVANCE L5 connectivity system has surpassed 500,000 flights since its launch in August 2017. The system is currently installed on over 1,500 aircraft, consuming 273.7 terabytes of data. In Q3 2021, flight counts rose 24% compared to pre-COVID levels in 2019, with a 78% increase in megabytes consumed daily. The AVANCE L5 system provides connectivity speeds of 2-7+ Mbps, enhancing customer experience for data-intensive activities like video conferencing. Gogo leads the business aviation broadband market.
Gogo Inc. reported strong financial results for Q3 2021, with total revenue of $87.2 million, a 31% increase year-over-year. Service revenue reached $66.2 million, up 24%, while equipment revenue hit $21.0 million, a remarkable 59% increase. The company also achieved a positive net income of $19.7 million, compared to a loss in Q3 2020. Gogo reaffirmed its 2021 revenue guidance, projecting a total between $325 million and $335 million.
Adjusted EBITDA was $40.8 million, and total cash increased to $133.2 million.
Gogo Business Aviation (NASDAQ: GOGO) addressed reports of federal discussions regarding potential 5G interference with aircraft radio altimeters. The FAA and FCC are concerned about the C-Band spectrum's impact on altimeters that operate in the 4.0 GHz - 4.2 GHz range. Gogo clarified that it does not use these frequencies and plans to operate its 5G network in the 800 MHz band and unlicensed spectrum (2.423 GHz – 2.475 GHz), ensuring no interference. Gogo remains the largest provider of broadband services in business aviation, with over 6,000 aircraft connected.
Gogo Business Aviation announced that its upcoming Gogo 5G service is expected to deliver an average speed of approximately 25 Mbps, with peak speeds ranging between 75-80 Mbps. President Sergio Aguirre stated that this upgrade will significantly enhance connectivity experiences compared to current speeds of 2-7+ Mbps. The rollout of the Gogo 5G network is on schedule for the second half of 2022, with Jet Edge as the launch customer. Gogo has been recognized for its customer satisfaction in the airborne connectivity sector, ranking first in seven of eight survey categories this year.
Gogo Inc. (NASDAQ: GOGO) will announce its third-quarter 2021 financial results before the market opens on November 4, 2021. The company will hold a conference call for analysts at 8:30 a.m. ET on the same day. Gogo is the leading provider of broadband connectivity for the business aviation sector, servicing thousands of aircraft. As of June 30, 2021, 6,036 aircraft were using its ATG systems, and 4,587 had satellite connectivity. Gogo aims to enhance inflight connectivity and entertainment for various business aircraft.
Jet Edge International has partnered with Gogo (NASDAQ: GOGO) as the launch customer for Gogo's upcoming 5G network. The agreement involves upgrading 50 of Jet Edge's managed aircraft equipped with the AVANCE L5 system to Gogo 5G over a 24-month period. Gogo 5G aims to provide high-speed connectivity and low latency to meet the growing demand for data-heavy services. The deployment of the network is in progress, with the full launch expected in the second half of 2022.
On October 11, 2021, Gogo (NASDAQ: GOGO) announced that Banyan Air Service is nearing completion of Supplemental Type Certification (STC) for Gogo's AVANCE L3 on the HondaJet, enhancing its presence in the light jet sector. The AVANCE systems, which include L3 and L5, are now certified on various business aircraft, totaling over 2,000 systems in operation. The expansion highlights Gogo's leadership in inflight connectivity and the growing demand from customers.
Gogo Business Aviation (NASDAQ: GOGO) has introduced SmartShield, a premium membership program designed for AVANCE and classic ATG system users. Priced at $5,000 annually with a three-year commitment, it offers benefits such as fixed pricing, unlimited equipment warranty, and monthly data rollover. Additionally, Gogo provides a $10,000 installation rebate and $15,000 service credit for upgrades to the AVANCE system. With over 6,000 aircraft connected, Gogo reinforces its leadership in business aviation connectivity.
Gogo Inc. (NASDAQ: GOGO), a leader in broadband connectivity for business aviation, has updated its long-term financial targets. The revenue growth forecast has been increased to a compounded annual growth rate of approximately 15% from 2020 to 2025, up from the previous target of at least 10%. The company anticipates an annual Adjusted EBITDA margin rise from 40% in 2021 to 45% in 2025. Free Cash Flow is projected at approximately $125 million in 2023 and $200 million in 2025. A conference call is scheduled for September 30, 2021, to discuss these updates.
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