Gogo (NASDAQ:GOGO) Issues Earnings Results

Gogo (NASDAQ:GOGO) released its quarterly earnings data on Thursday. The technology company reported $0.03 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.06 by ($0.03), Zacks reports. The firm had revenue of $222.81 million during the quarter, compared to analysts’ expectations of $229.35 million. Gogo had a negative net margin of 0.09% and a positive return on equity of 22.55%. Gogo’s revenue was down 1.4% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $0.09 EPS.

Here are the key takeaways from Gogo’s conference call:

• Galileo adoption accelerated: Gogo shipped 108 Galileo units in Q2, bringing cumulative shipments to 518, while aircraft online rose 66% sequentially to 184. New fleet wins, including Airshare, and additional STC approvals expanded the platform’s addressable market.
• Military and government revenue reached another record: Service revenue increased 40% year over year and 20% sequentially, driven by higher utilization amid geopolitical tensions and longer-term modernization demand. Gogo is also exploring UAV connectivity, which could significantly broaden the opportunity.
• Legacy ATG attrition continued: Total ATG aircraft online fell 6% sequentially to 5,731, with management expecting roughly 1,200 total ATG units online by year-end, including 5G. Some declines reflect migrations to Galileo and 5G, but a portion of the remaining classic customer base is expected to deactivate.
• Full-year guidance was reduced: Revenue guidance is now $870 million to $895 million and adjusted EBITDA guidance is $175 million to $185 million, reflecting delayed Galileo and 5G equipment shipments, product mix, and higher litigation costs. Free cash flow guidance was also lowered to $65 million to $85 million.
• Debt reduction remains the top capital allocation priority: Gogo paid down $21.1 million of term-loan principal and ended Q2 with $63.1 million in cash, but net leverage rose to 3.8 times after funding a $40 million Satcom Direct earn-out payment.

Gogo Trading Down 0.3%

Shares of NASDAQ:GOGO traded down $0.01 on Friday, hitting $3.63. The company had a trading volume of 2,386,536 shares, compared to its average volume of 1,476,514. The firm’s 50-day simple moving average is $3.68 and its two-hundred day simple moving average is $4.16. The firm has a market capitalization of $490.92 million, a price-to-earnings ratio of 363.00 and a beta of 1.13. The company has a quick ratio of 1.27, a current ratio of 1.73 and a debt-to-equity ratio of 6.74. Gogo has a 1 year low of $3.02 and a 1 year high of $13.13.

Hedge Funds Weigh In On Gogo

Several hedge funds and other institutional investors have recently modified their holdings of GOGO. Stifel Financial Corp purchased a new stake in Gogo in the fourth quarter worth about $52,000. nVerses Capital LLC purchased a new position in shares of Gogo during the 4th quarter worth approximately $57,000. Quarry LP grew its holdings in shares of Gogo by 86.1% during the 3rd quarter. Quarry LP now owns 7,171 shares of the technology company’s stock worth $62,000 after acquiring an additional 3,318 shares during the period. Focus Partners Wealth bought a new position in shares of Gogo in the 3rd quarter worth approximately $72,000. Finally, Ritter Alpha LP bought a new position in shares of Gogo in the 4th quarter worth approximately $74,000. Hedge funds and other institutional investors own 69.60% of the company’s stock.

Analyst Ratings Changes

Several research firms recently issued reports on GOGO. Wall Street Zen cut Gogo from a “hold” rating to a “sell” rating in a research note on Saturday. Weiss Ratings upgraded Gogo from a “sell (d+)” rating to a “hold (c-)” rating in a report on Monday, August 3rd. Morgan Stanley lowered their price target on Gogo from $8.00 to $7.00 and set an “equal weight” rating for the company in a research report on Thursday, May 21st. Finally, Roth Capital reiterated a “buy” rating on shares of Gogo in a report on Friday. One analyst has rated the stock with a Buy rating and three have issued a Hold rating to the company’s stock. According to MarketBeat.com, the company presently has a consensus rating of “Hold” and a consensus price target of $8.50.

About Gogo

Gogo Inc is a leading provider of in-flight connectivity and entertainment solutions for commercial and business aviation. The company specializes in delivering broadband internet, voice and text services, and streaming entertainment to passengers at 35,000 feet. Gogo’s offerings include both air-to-ground (ATG) networks and satellite-based connectivity, enabling reliable in-flight internet access across a range of aircraft types.

Gogo’s ATG network spans the United States and portions of Canada, using ground towers to transmit data signals directly to equipped aircraft.