Gogo Inc Reports Q2 2024 Financial Results
Intellectia.AI Updated: 2024-08-08
Gogo Inc. Reports Q2 2024 Financial Results
Gogo Inc. (NASDAQ: GOGO) announced its financial results for the quarter ended June 30, 2024.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Q1 2024 | Consensus Estimates | YoY Change | QoQ Change |
|---|---|---|---|---|---|---|
| Total Revenue | $102.1 million | $103.1 million | $104.3 million | $99.01 million | -1% | -2% |
| Service Revenue | $81.9 million | $78.7 million | $81.4 million | N/A | +4% | +0.6% |
| Equipment Revenue | $20.1 million | $24.2 million | $22.6 million | N/A | -17% | -11% |
| Net Income | $0.8 million | $89.8 million | $30.5 million | N/A | -99% | -97% |
| Diluted EPS | $0.01 | $0.67 | $0.43 | $0.07 | -98.5% | -98% |
| Adjusted EBITDA | $30.4 million | $44.1 million | $43.2 million | N/A | -31% | -30% |
| Cash & Cash Equivalents | $161.6 million | N/A | $152.8 million | N/A | N/A | +6% |
| Free Cash Flow | $24.9 million | $13.3 million | $32.1 million | N/A | +87% | -22% |
Interpretation: Gogo Inc. experienced a slight year-over-year and quarter-over-quarter decrease in total revenue, primarily due to a significant decline in equipment revenue. However, the company achieved record service revenue and maintained robust cash flow despite a substantial decrease in net income and adjusted EBITDA.
Revenue Performance by Segment
| Segment | Q2 2024 Revenue | Previous Guidance | YoY Change | QoQ Change |
|---|---|---|---|---|
| Service Revenue | $81.9 million | $78.7 million (Q2 2023) | +4% | +0.6% |
| Equipment Revenue | $20.1 million | $24.2 million (Q2 2023) | -17% | -11% |
Interpretation: While equipment revenue experienced a significant downturn both year-over-year and quarter-over-quarter, service revenue saw a notable increase, contributing positively to the overall financial performance.
Operational Data
| Key Operational Data | Q2 2024 | Q2 2023 | Q1 2024 | YoY Change | QoQ Change |
|---|---|---|---|---|---|
| Total ATG Aircraft Online | 7,031 | 7,069 | 7,101 | -1% | -1% |
| Total AVANCE Aircraft Online | 4,215 | 3,600 | 4,092 | +17% | +3% |
| AVANCE Equipment Units Shipped | 231 | 279 | 256 | -17% | -10% |
| Average Monthly Revenue per ATG ARPU | $3,468 | $3,365 | $3,451 | +3% | +0.5% |
Comments from Company's Officers
Oakleigh Thorne, Chairman and CEO, highlighted the excitement and momentum building ahead of the expected launches of Gogo Galileo HDX in Q4 2024 and of Galileo FDX and Gogo 5G in 2025. Thorne emphasized that these innovations are expected to expand Gogo’s market and significantly improve performance for customers.
Jessi Betjemann, Executive Vice President and CFO, noted the record service revenue and strong free cash flow, reaffirming the company’s expectation for substantial free cash flow growth in 2025 driven by the projected launches of Gogo Galileo and 5G.
Share Repurchase Program
In Q2 2024, Gogo repurchased approximately 1.5 million shares for approximately $13 million. In total, the company has repurchased over 3.1 million shares for approximately $28 million in the last three quarters.
Forward Guidance
- 2024 Guidance Update:
- Total revenue projected to be between $400 million and $410 million (previously $410 million to $425 million).
- Adjusted EBITDA at the high end of the range of $110 million to $125 million.
- Free cash flow projected to be between $35 million and $55 million.
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Capital expenditures of approximately $35 million.
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Long-Term Financial Targets:
- Free cash flow of approximately $150 million in 2025.
- CAGR of 15%-17% revenue growth from 2023 to 2028.
- Expected Adjusted EBITDA margin reaching 40% by 2028.
Stock Price Movement
Following the earnings release, Gogo’s stock price increased by approximately 0.75%.
Summary: Gogo Inc.'s second quarter results demonstrate resilience in the service revenue segment despite challenges in equipment sales. The company's proactive approach to innovation and strategic investments, coupled with strong free cash flow and prudent financial guidance, places it on a strong trajectory for future growth.