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Gogo Inc. (GOGO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $223.6M, up 122% YoY and roughly in line with consensus; GAAP diluted EPS was $(0.01), reflecting a $15M pre-tax earn-out accrual related to the Satcom Direct acquisition; Adjusted EBITDA was $56.2M with a 25% margin, down sequentially as mix shifted toward lower-margin equipment and increased 5G/HDX/FDX investments .
  • Versus Wall Street: revenue modestly beat consensus ($223.6M vs $222.2M*) and Primary EPS exceeded consensus ($0.12 vs $0.07*); Adjusted EBITDA beat ($56.2M vs $48.6M*). Estimates were S&P Global figures; see Estimates Context for details.
  • Guidance reiterated at the high end: FY25 revenue $870–$910M, Adjusted EBITDA $200–$220M, and Free Cash Flow $60–$90M; management lowered strategic initiative OpEx and strategic investment assumptions and reset FCC reimbursement expectations, but kept net capex at ~$40M .
  • Operational catalysts: record 437 ATG units sold, >200 HDX shipments YTD, 5G network flight testing succeeded with year-end 2025 network launch timing confirmed; VistaJet to deploy Galileo fleet-wide; FDX line-fit win at Bombardier; multiple Mil/Gov contract wins .
  • Near-term stock reaction drivers: confirmation of 5G launch timing, accelerating Galileo momentum (HDX/FDX STCs and fleet deals), and reiterated high-end FY25 guide vs continued near-term ATG AOL pressure and Q4 EBITDA headwinds called out by management .

What Went Well and What Went Wrong

What Went Well

  • New product momentum: “We are at the goal line on 5G,” with successful end-to-end airborne 5G calls and Q4 launch timing reiterated; 28 of 33 5G STCs completed, line-fit commitments with five OEMs .
  • Galileo traction: pipeline ~1,000 HDX/FDX units (up from 500), >200 HDX shipments YTD with 93% tied to customers, FDX flight demos reached ~200 Mbps, and Bombardier line-fit win; VistaJet plans fleet-wide Galileo deployment .
  • Record equipment shipments and service margins: 437 ATG units sold (+8% q/q) including 229 C-1 units ahead of LTE cutover; combined service margin was ~52% and Adjusted EBITDA margin ~25% .

What Went Wrong

  • ATG fleet pressure and ARPU drift: total ATG AOL fell to 6,529 (−7% YoY, −3% q/q) and ATG ARPU dipped to $3,407 (−3% YoY, −1% q/q), with management expecting ATG pressure to persist near-term .
  • Sequential EBITDA decline expected: Q4 EBITDA to decline sequentially due to increased 5G/Galileo testing spend and mix shift toward lower-margin equipment; ATG pressures also weigh on Q4 margin .
  • GAAP EPS impact from earn-out: net loss of $(1.9)M (diluted $(0.01)) driven by a $15M pre-tax fair value adjustment to the Satcom earn-out liability, masking solid underlying Adjusted EBITDA and FCF generation .

Financial Results

P&L Comparison (YoY and Seq) and Estimates

MetricQ3 2024Q2 2025Q3 2025vs Est. (Q3 2025)
Total Revenue ($USD Millions)$100.5 $226.0 $223.6 $222.2*
Service Revenue ($USD Millions)$81.9 $194.0 $190.0 —
Equipment Revenue ($USD Millions)$18.7 $32.1 $33.6 —
GAAP Net Income ($USD Millions)$10.6 $12.8 $(1.9) —
Diluted EPS (GAAP, $)$0.08 $0.09 $(0.01) —
Primary EPS (Normalized, $)——$0.12*$0.07*
Adjusted EBITDA ($USD Millions)$34.8 $61.7 $56.2 $48.6*
Adjusted EBITDA Margin (%)——25% —

Estimates marked with * retrieved from S&P Global.

Margins (Q3 only where disclosed)

Margin MetricQ3 2025
Service Margin (%)~52%
Equipment Margin (%)~8%
Adjusted EBITDA Margin (%)25%

Segment/Type and Market Breakdown

Disaggregated Revenue ($USD Millions)Q3 2024Q2 2025Q3 2025
Satellite Broadband (Service)$1.1 $76.7 $78.5
ATG Broadband (Service)$77.7 $74.2 $71.1
Narrowband & Other (Service)$3.1 $43.0 $40.4
Business Aviation (Service)$81.9 $165.4 $162.6
Military/Government (Service)—$28.6 $27.3
Satellite Broadband (Equipment)$0.06 $4.6 $9.5
ATG Broadband (Equipment)$17.2 $21.8 $17.5
Narrowband & Other (Equipment)$2.6 $5.7 $6.7

KPIs

KPIQ3 2024Q2 2025Q3 2025
Total ATG Aircraft Online (AOL)7,016 6,730 6,529
AVANCE ATG AOL4,379 4,791 4,890
AVANCE Share of ATG AOL (%)62% 71% 75%
C-1 AOL—21 101
Broadband GEO AOL1,182 (pro forma) 1,321 1,343
ATG ARPU ($/month)$3,497 $3,445 $3,407
ATG Units Sold (Equipment)214 405 437

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Millions)FY 2025High end of $870–$910M High end of $870–$910M Maintained
Adjusted EBITDA ($USD Millions)FY 2025High end of $200–$220M; includes ~$20M OpEx for 5G/Galileo High end of $200–$220M; includes ~$15M OpEx for 5G/Galileo Lowered OpEx
Free Cash Flow ($USD Millions)FY 2025High end of $60–$90M; ~$60M strategic investments net of FCC reimbursement High end of $60–$90M; ~$40M strategic investments net of FCC reimbursement Lowered strategic investments
Net Capital Expenditures ($USD Millions)FY 2025~$40M; assumes $50M FCC reimbursement ~$40M; assumes $30M FCC reimbursement Reset FCC reimbursement
Notes on EBITDA ReconciliationFY 2025No forward-looking reconciliation (variability) No forward-looking reconciliation (variability) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
5G ATG LaunchChip fabrication progressing; Q4 2025 launch planned; ~301 pre-provisioned aircraft Successful airborne 5G tests; Q4 launch timing reiterated; 28/33 STCs done; 5 OEM line-fit commitments Accelerating execution
Galileo HDX/FDXPMA approvals ahead of schedule; early HDX shipments; targeting 41k global aircraft; ramping STCs Pipeline ~1,000; >200 HDX shipments YTD; 50 installs; FDX flight demos ~200 Mbps; Bombardier line-fit; VistaJet fleet deployment Strong momentum
ATG Fleet & ARPUATG AOL declining due to maintenance; price increase offset; AVANCE upgrades record ATG AOL −7% YoY; ARPU −3% YoY; record AVANCE/C-1 shipments to mitigate LTE cutover risk Near-term pressure
Tariffs/Macro~$5M impact (EBITDA/working capital); manageable; service largely exempt Guidance includes tariff impacts; reiterated high-end FY ranges Impact managed
FCC ReimbursementExpect ~$50M program reimbursement to support LTE upgrade and AVANCE incentives Q3 receivables $26M; $59.9M program-to-date; FY assumption now $30M reimbursement in guidance Timing/reset
Mil/Gov ContractsDoD PLEO/pace demand; global sovereign demand rising; strategy leveraging commercial tech 5-year U.S. agency multi-orbit contract; SES Space & Defense BPA via U.S. Space Force Expanding pipeline
OEM Line-fit & PartnersLine-fit options expanding (Gulfstream, Textron); Hughes partnership Bombardier line-fit (FDX); Hughes/Gogo ESA milestones (HDX/FDX) Broadening partners

Management Commentary

  • “I am thrilled to say that we are at the goal line on 5G. Our 5G flight testing began on October 28th, and the results have exceeded our expectations.” – Chris Moore, CEO .
  • “We reiterate the high-end of our 2025 financial guidance ranges for revenue, Adjusted EBITDA and Free Cash Flow.” – Zac Cotner, CFO .
  • “Our combined Galileo pipeline for both HDX and FDX is now approximately 1,000… and we expect a very significant ramp in shipments and AOL growth in 2026 and beyond.” – Chris Moore, CEO .
  • “As of Q3, we have achieved over $30 million of annualized synergies and expect run-rate synergies to modestly exceed our previous range of $30–$35 million within ~2 years of closing.” – Zac Cotner, CFO .
  • “ATG equipment units sold in Q3 totaled 437, an all-time record… C-1 units sold in Q3 totaled 229… designed to allow connectivity for Classic ATG customers on our new LTE network when it is expected to come online in May 2026.” – Company press release .

Q&A Highlights

  • Q4 EBITDA outlook: Headwinds split between ATG pressure and increased OpEx, with a bigger piece from 5G testing; mix shift toward lower-margin equipment compresses margins .
  • Classic to C-1/5G conversion: MRO partners deploying field teams; C-1 is a simple, subsidized box swap; customers with budget will upgrade to AVANCE/5G; management views de-risked LTE cutover as a key focus .
  • ARPU trajectory: 5G ARPU expected to be ~2x classic; 50–80 Mbps 5G service enables higher-value use cases and streaming in-air, supporting ARPU uplift post-launch .
  • Government shutdown effects: Minimal impact on FCC reimbursement timing; monitoring approvals but no major revenue impacts anticipated .

Estimates Context

  • Q3 2025 comparison to S&P Global consensus: revenue $223.6M vs $222.2M* (beat); Primary EPS $0.12 vs $0.07* (beat); Adjusted EBITDA $56.2M vs $48.6M* (beat). GAAP diluted EPS was $(0.01) due to a $15M pre-tax earn-out accrual; Primary EPS reflects normalized results excluding unusual items .
  • Forward look: Q4 2025 revenue consensus ~$222.7M* and EPS ~$0.03* vs management caution on sequential EBITDA decline due to higher testing spend and ATG pressure; consensus may need to reflect lower Q4 EBITDA sequentially even with modest revenue growth .

Estimates marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • New product catalysts are tangible: 5G network launch timing confirmed for year-end 2025 with revenue activation in Q1 2026; Galileo HDX/FDX ramping with fleet and OEM wins—key drivers for 2026 service growth .
  • Near-term margin headwinds likely in Q4: mix shift to equipment and higher 5G/Galileo testing costs; expect sequential EBITDA decline despite modest revenue growth .
  • ATG fleet pressure is manageable: record AVANCE/C-1 shipments and FCC support mitigate LTE cutover risk; 5G ARPU uplift should offset classic declines over time .
  • Synergy and deleveraging path intact: >$30M annualized synergies achieved; net leverage ~3.1x; management eyeing 2026 actions to reduce interest expense and potentially refinance .
  • Mil/Gov adds durable revenue: multi-orbit contracts and Space Force BPA support multi-year service revenue stability and strategic diversification .
  • Narrative that moves the stock: confirmation of 5G launch, accelerating Galileo adoption (VistaJet/Bombardier), reiterated high-end FY guide, alongside transparent acknowledgment of near-term ATG/EBITDA pressures—set up for 2026 inflection .

Additional Supporting Press Releases (Q3 context)

  • Gogo begins 5G flight testing; network validation underway; up to 80 Mbps speeds expected; ~400 aircraft pre-provisioned .
  • SD Government five-year U.S. agency multi-orbit airborne satcom contract win .
  • Hughes and Gogo: HDX/FDX ESA milestones achieved; STC portfolio expanding .
  • First FDX STC issued (ALOFT AeroArchitects) covering Boeing BBJ; initial install completed .