Gogo announces record quarterly revenue of $188m

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

Gogo has announced a record quarterly revenue of £188m in its fourth quarter and full-year 2017 financial results.

It said its record full-year revenue of $699m exceeded guidance, driven by a 10% increase in commercial aircraft online to 3,231, a 12% increase in air to ground business aircraft online to 4,678, and increased customer usage across all segments.

It said net loss increased to $41.1 million, a 53% increase from Q4 2016, and adjusted EBITDA grew to a record $24.9 million, up 8% from Q4 2016.

Gogo said 2Ku was installed on more than 470 aircraft in 2017 and is now flying on 620 aircraft.

Recent contract wins for 2Ku included LATAM Airlines and Cathay Pacific Group.

Gogo announced in October 2017 that it had been selected by LATAM Airlines Brazil to introduce inflight connectivity using Gogo’s 2Ku technology to 100 of its A320 aircraft, which operate flights in Brazil as well as to other countries in Latin America.

Gogo’s inflight connectivity service with LATAM will begin in the first half of 2018 and the roll-out of the technology is expected to be completed in the first half of 2019.

Gogo announced its Cathay Pacific contract in November 2017. The carrier will install 2Ku on its Airbus A330 and Boeing 777 aircraft across Cathay Pacific and Cathay Dragon fleets, which are both part of the Cathay Pacific Group.

Michael Small, Gogo’s President and CEO, said: “During the fourth quarter, we executed on our strategic initiatives: installing 2Ku rapidly, engaging more passengers, and winning aircraft.

“Our continued rapid deployment of high-bandwidth technologies in 2018 is the catalyst for delivering a great customer experience and long-term revenue and profitability growth.

“We fitted 227 aircraft with 2Ku in Q4 2017 [473 total in 2017] and peak speeds in Q4 were up 30% quarter on quarter, thanks to our next-generation modem and layering of high-throughput satellites (HTS), most recently moving nearly 200 aircraft to SES-15 in January.

“We expect to end 2018 with between 1,100 and 1,200 2Ku aircraft online, including approximately 450 aircraft in commercial aviation, rest of world.

“GOL also launched Gogo TV and we expect other airlines to follow,” Small said.

He added that it is also making significant inroads with 2Ku in the VVIP market and its next-gen ATG system will be commercially available later this year in North America and will be a “hot seller”.

John Wade, Gogo’s Chief Operating Officer, added that it was on track for 2Ku to be factory line-fit with Airbus and is making good progress with Boeing and the 737MAX.

“We expect to see our first line-fit Airbus orders in the first half of 2018,” Wade said.

Wade did comment that a small number of 2Ku problems had been caused by de-icing fluid getting under the radome and into the antenna mechanism and making it “sticky”. Wade said that was an easy fix.

Barry Rowan, Gogo’s Executive Vice President and CFO, added: “Our record financial results for the quarter lay a strong foundation for 2018 financial performance.

“With 2Ku aircraft online scaling in 2018 and continued rapid growth of our business aviation division, we look forward to delivering another strong year of financial performance as we target achieving positive free cash flow in 2019.”

Read the full Gogo fourth quarter and full year results

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