Gogo (GOGO) Q2 Revenue Jumps 122%

Gogo (GOGO -21.29%), an aviation connectivity company serving business, military, and government markets, reported Q2 2025 earnings on August 7, 2025. The key news was a large year-over-year increase in GAAP revenue, topping consensus forecasts for GAAP revenue, and the integration of its Satcom Direct acquisition. GAAP revenue rose to $226.0 million, ahead of the $219.8 million GAAP estimate, while earnings per share (EPS, GAAP) came in at $0.09, missing the GAAP forecast of $0.11. Despite the EPS (GAAP) shortfall, performance on Adjusted EBITDA and Free Cash Flow (non-GAAP) was robust, and management raised guidance for FY2025. On the whole, the quarter showed significant transformation, strong operational execution, and further progress integrating Satcom Direct, with expansion on several financial and product metrics offset by higher integration costs and softness in legacy Air-to-Ground aircraft online metrics.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

The Business and Strategic Focus

Gogo provides in-flight connectivity solutions, mainly serving the business aviation, government, and military aviation sectors. The company's offerings include high-speed internet and data services delivered via a mix of Air-to-Ground (ATG), satellite-based technologies, and hybrid systems. Its customers include private jet owners and government fleets.

In 2024, Gogo acquired Satcom Direct, a move that significantly broadened its reach and enabled it to serve every segment of aviation, including rapidly expanding markets in military and government. The company now focuses on providing multi-orbit, multi-band solutions—including advances in low-earth orbit (LEO) satellites, the Galileo broadband platform, and preparation for a coming 5G launch. Key to Gogo’s success are its ability to innovate, integrate Satcom Direct fully, deepen OEM (original equipment manufacturer) partnerships, maintain regulatory compliance, and manage both organic growth and acquired assets.

Quarterly Highlights: Integration, Growth, and Product Momentum

The period showcased a major step-up in scale. The integration of Satcom Direct drove this expansion, Satcom Direct reported revenue of $122.8 million, and boosting service revenue 137% year over year. Service revenue (GAAP) now accounts for most of Gogo’s income, with Satcom Direct contributing to growth in military and government contracts. This acquisition marks a structural shift for the company—most top-line expansion was transactional, from the deal, as pro forma revenue growth was only 1% year over year, revealing modest organic gains.

Product innovation continued at pace. Gogo saw sales of its AVANCE hardware—a modular Air-to-Ground (ATG) inflight internet platform—rise to 276 units, the highest in two years, up 19% from the prior year period. AVANCE-equipped aircraft represented approximately 71% of the ATG fleet. The Galileo product family, designed as a LEO satellite broadband system, continues gaining traction with 77 units shipped year-to-date. Management highlighted “flawless” customer feedback on early Galileo deployments.

Over 85% of synergy targets have already been met, and Gogo expects additional cost savings as it consolidates production and IT systems. The FCC reimbursement program, with $50 million anticipated for 2025, is expected to reduce capital expenditures for network upgrades. At the same time, the impact of tariffs has been contained, with Gogo stating that a $5 million hit is already included in 2025 forecasts, thanks to moving key Satcom Direct manufacturing to the US.

The ATG segment saw mixed results. While AVANCE and new technology upgrades progressed, total ATG-equipped aircraft online declined approximately 4% year over year as older units dropped off the network faster than upgrades happened. Management pointed to maintenance suspensions as the cause.

Technology, Product Families, and Market Reach

Gogo’s product strategy is anchored around combining ATG, LEO, and GEO (Geostationary Earth Orbit) satellite network technologies under one roof. The AVANCE platform, an advanced ATG system, allows fast Wi-Fi on business jets and is upgradable to next-generation satellite networks. The Galileo series, consisting of HDX and FDX LEO satellite broadband systems, targets business jet owners who want global, low-latency, high-speed internet service. OEM partnerships have secured line-fit positions for Galileo, opening the door for more direct installations by aircraft manufacturers.

The company also highlighted strategic partnerships that underpin its offerings. Collaborations with network providers such as Hughes and Intelsat, and regulatory compliance across FAA and FCC jurisdictions, strengthen its global reach and help Gogo stand out in a crowded market. The expanded dealer and OEM network now covers every major aircraft manufacturer and about 140 independent dealers, supports the pipeline growth for new installations across North America and internationally.

Gogo ended the quarter with $102.1 million in cash, up from $41.8 million at the end of December 2024, and held $832.5 million in term loans. Net leverage remained stable, with Free cash flow (non-GAAP) increased 35% to $33.5 million and Net income (GAAP) was substantially higher. However, much of the expansion in income was offset by amortization and one-time costs related to the Satcom Direct integration.

Board oversight widened its focus too, with the appointment of General Mike Minihan, a former US Air Mobility Command General, signaling increased attention to defense and military market segments.

Looking Ahead: Guidance and Investor Focus

Management raised its 2025 outlook for revenue, Adjusted EBITDA (non-GAAP), and Free Cash Flow (non-GAAP) to the upper end of prior guidance. The company now expects full-year 2025 revenue, Adjusted EBITDA, and Free Cash Flow at the high end of the previously guided ranges: $870–$910 million, $200–$220 million, and $60–$90 million, respectively. Strategic initiative expenses are projected at about $20 million for FY2025, and Net capital expenditures remain at $40 million for 2025, partly offset by the FCC reimbursement program. Gogo noted that 2025 will be a trough year for Free Cash Flow (non-GAAP), with a jump expected in 2026 as one-time integration and development costs roll off and as new Galileo and 5G revenue streams mature.

Investors should watch the pace of integration cost removal, the ramp of new Galileo and 5G sales, stabilization or reversal in legacy ATG aircraft online, and further synergy gains in 2026. While service revenue is solid, margin pressures—from Satcom Direct’s lower relative margins, heavy R&D spending, and close-to-cost equipment pricing for Galileo—will be a key area of focus in the coming quarters.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.