Gogo (NASDAQ:GOGO) Posts Quarterly Earnings Results, Misses Estimates By $0.03 EPS

Gogo (NASDAQ:GOGO) issued 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 business had revenue of $222.81 million during the quarter, compared to analysts’ expectations of $229.35 million. Gogo had a positive return on equity of 22.55% and a negative net margin of 0.09%.The company’s quarterly revenue was down 1.4% on a year-over-year basis. During the same quarter last year, the business 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 Price Performance

Shares of Gogo stock traded down $0.01 during trading on Friday, hitting $3.63. 2,386,536 shares of the stock traded hands, compared to its average volume of 1,476,514. The stock has a market cap 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 52 week low of $3.02 and a 52 week high of $13.13. The firm’s fifty day moving average is $3.68 and its 200-day moving average is $4.16.

Analyst Upgrades and Downgrades

Several equities analysts recently commented on GOGO shares. Morgan Stanley reduced their target price 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. Weiss Ratings upgraded Gogo from a “sell (d+)” rating to a “hold (c-)” rating in a research report on Monday, August 3rd. Roth Capital reissued a “buy” rating on shares of Gogo in a report on Friday. Finally, Wall Street Zen cut shares of Gogo from a “hold” rating to a “sell” rating in a research report on Saturday. One investment analyst has rated the stock with a Buy rating and three have given a Hold rating to the company. According to data from MarketBeat, the stock has a consensus rating of “Hold” and a consensus price target of $8.50.

Institutional Trading of Gogo

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

Gogo Company Profile

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.