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    Gogo (GOGO)

    Q1 2025 Earnings Summary

    Reported on May 9, 2025 (Before Market Open)
    Pre-Earnings Price$7.57Last close (May 8, 2025)
    Post-Earnings Price$9.52Open (May 9, 2025)
    Price Change
    $1.95(+25.76%)
    MetricYoY ChangeReason

    Total Revenue

    Q1 2025 up 121% (from $104.32M to $230.31M)

    The extraordinary jump was driven by a dramatic expansion in both service and equipment revenue following the acquisition of Satcom Direct in Q4 2024. This contrasts with FY2024’s modest 1.7% increase where service revenue growth (up 2.8%) modestly offset a 2.7% decline in equipment revenue.

    Service Revenue

    Q1 2025 up 143.2% (from $81.67M to $198.61M)

    Service revenue surged mainly due to the acquisition of Satcom Direct, which added new revenue streams (e.g. $119.1M overall, with $29.3M from Military/Government and $77.7M from satellite broadband) that were absent in the prior period. In contrast, in FY2024, the increase was largely driven by improvements in ARPU (from $3,380 to $3,481) and modest broadband growth.

    Equipment Revenue

    Q1 2025 up 39.9% (from $22.65M to $31.70M)

    The increase in equipment revenue was primarily due to the inclusion of Satcom Direct’s contributions—adding approximately $9.9M in Q1 2025—unlike previous periods where equipment revenue saw only modest increases (e.g., a 1% rise in FY2024) due to mixed trends between ATG broadband (up by about 2 million) and declines in other segments.

    Operating Income

    Q1 2025 marginal increase ($34.67M to $35.19M)

    Operating income grew only slightly despite a booming revenue base, leading to a significant compressions in operating margins from roughly 33% to 15%. This indicates that higher integration costs and increased expenses from the recent acquisition were not offset by the expanded top line.

    Net Income

    Q1 2025 down 60% (from $30.49M to $12.04M)

    Net income declined steeply due to the impact of disproportionately high non-operating expenses, notably a significant rise in interest expense that outweighed the benefits of higher operating revenue. This divergence highlights the challenge of integrating acquisitions profitably.

    Interest Expense

    Q1 2025 more than doubled (from $8.41M to $16.56M)

    Interest expense surged (by over 96%) as a result of increased borrowing associated with the acquisition of Satcom Direct and other financing dynamics, which built on a prior period increase of 16.3% in FY2024 due to reduced benefits from interest rate caps.

    MetricPeriodGuidanceActualPerformance
    Total Revenue
    Q1 2025
    $870M–$910M for FY 2025
    $230.31M
    Beat
    Free Cash Flow
    Q1 2025
    $60M–$90M for FY 2025
    $26.30M (calculated from Net Op. Cash 32.47M − CapEx 2.75M − Intangibles 3.42M)
    Beat
    Capital Expenditures
    Q1 2025
    ~$60M for FY 2025
    $6.17M (2.75M + 3.42M)
    Met

    Research analysts covering Gogo.