Gogo reports record quarterly revenue of $165m, up 17%

Gogo President and CEO Michael Small.
Gogo President and CEO Michael Small.

Gogo has reported a record quarterly revenue of $165 million, up 17% from the previous year.

Gogo says service revenue increased to $146.5 million, up 23% from Q1 2016, driven by a 9% increase in commercial aircraft online to 2,995, an 18% increase in ATG business aircraft online to 4,341, and increased customer usage across all segments.

However its net loss increased to $41.4 million, a 72% increase from Q1 2016, while adjusted earnings before interest, tax, depreciation and amortization (EBITDA) decreased to $10.7 million, down 26% from Q1 2016.

Gogo says its 2Ku solution was installed on more than 170 aircraft across eight airlines on five continents as of April 30. More than 1,430 2Ku aircraft were awarded, but not yet installed, as of the same date.

Virgin Australia selected Gogo’s 2Ku for in-flight connectivity on its domestic and international fleets, which include Boeing 737-800 and 777 aircraft and Airbus A330 aircraft.

Its Virgin Australia win brought the total 2Ku-awarded aircraft to more than 1,600.

Michael Small, Gogo’s President and CEO, said: “We achieved another important milestone when Airbus selected our industry-leading 2Ku technology for its High Bandwidth Capacity (HBC) programme.”

This designation officially enables factory installation of Gogo’s 2Ku technology on Airbus A320 Family, A330, and A380 aircraft.

“We remain focused on hitting our 2Ku installation targets and driving 2Ku system performance above the 15 Mbps we are already delivering to connected passengers around the globe,” said Small.

“We reaffirm all of our 2017 and long-term guidance and remain on track to becoming free cash flow positive in 2019.”

Gogo has now achieved a speed of 100 Mbps using its 2Ku antenna, next generation modem and a high-throughput (HTS) satellite on its test aircraft.

The company has also partnered with satellite operator SES to secure additional capacity over North America, Canada and the northern Pacific Ocean, leveraging the on-demand flexibility the Ku ecosystem offers.

Gogo sector details

Gogo’s total aircraft online increased to 2,714, up 214 aircraft from March 31, 2016, and included 106 2Ku and more than 1,700 ATG-4 equipped aircraft.

As of March 31, 2017, Commercial Aviation – North America had approximately 800 aircraft awarded for installation or conversion to 2Ku, 60 of which are net new aircraft.

Business aviation service revenue increased to $40.0 million, up 30% from Q1 2016, driven primarily by an 18% increase in ATG systems online and a 12% increase in average monthly service revenue per ATG unit online.

Commercial Aviation – Rest of World (CA-ROW) total revenue increased to $10.3 million, up 123% from Q1 2016, driven primarily by higher ARPA and an increase in aircraft equivalents.

Aircraft online increased to 281, up 44 aircraft from Q1 2016. CA-ROW had approximately 650 net new 2Ku awarded, but not yet installed, aircraft as of March 31, 2017.

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