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

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

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 NASDAQ GOGO traded down $0.01 during midday trading on Friday, hitting $3.63. 2,386,536 shares of the company’s stock were exchanged, compared to its average volume of 1,476,514. Gogo has a 12-month low of $3.02 and a 12-month high of $13.13. The company has a current ratio of 1.73, a quick ratio of 1.27 and a debt-to-equity ratio of 6.74. The company has a market cap of $490.92 million, a price-to-earnings ratio of 363.00 and a beta of 1.13. The business’s fifty day moving average price is $3.68 and its two-hundred day moving average price is $4.16.

Analysts Set New Price Targets

A number of analysts recently issued reports on GOGO shares. Weiss Ratings raised Gogo from a “sell (d+)” rating to a “hold (c-)” rating in a report on Monday, August 3rd. Wall Street Zen lowered Gogo from a “hold” rating to a “sell” rating in a report on Saturday. Morgan Stanley decreased their price target on Gogo from $8.00 to $7.00 and set an “equal weight” rating on the stock in a research report on Thursday, May 21st. Finally, Roth Capital reissued 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 assigned a Hold rating to the company’s stock. According to MarketBeat.com, the company presently has an average rating of “Hold” and a consensus price target of $8.50.

Institutional Investors Weigh In On Gogo

Several hedge funds have recently bought and sold shares of GOGO. Brighton Jones LLC boosted its holdings in shares of Gogo by 69.6% in the 4th quarter. Brighton Jones LLC now owns 17,000 shares of the technology company’s stock worth $138,000 after purchasing an additional 6,978 shares in the last quarter. MML Investors Services LLC purchased a new position in shares of Gogo during the 4th quarter valued at about $96,000. DRW Securities LLC lifted its position in Gogo by 29.5% in the 4th quarter. DRW Securities LLC now owns 29,602 shares of the technology company’s stock worth $138,000 after buying an additional 6,748 shares during the last quarter. Hancock Whitney Corp bought a new stake in Gogo in the 3rd quarter worth approximately $92,000. Finally, Sherbrooke Park Advisers LLC purchased a new stake in Gogo in the third quarter worth approximately $107,000. 69.60% of the stock is currently owned by institutional investors.

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.