Public and private Wi-Fi network operator Boingo Wireless (NASDAQ:WIFI) reported mixed third-quarter results on Monday evening. Management painted the reporting period as a modest rebound from the second quarter's trough and said that Boingo's review of strategic options is finding "strong interest and engagement" from several potential partners. Investors were quick to embrace this report, driving Boingo's share prices 16% higher in Tuesday's trading session.

Boingo Wireless's third-quarter results by the numbers


Q3 2020

Q3 2019


Analyst Consensus


$58.8 million

$64.7 million


$59.4 million

GAAP net income (loss)

($3.0 million)

($0.1 million)



Adjusted earnings (loss) per diluted share





Data source: Boingo Wireless. GAAP = generally accepted accounting principles.

Revenues from the military/multifamily property segment rose 0.7% year over year, showing stability in Boingo's largest division. Distributed antenna systems (DAS) saw 8% lower sales year over year, directly attributable to a $1.8 million one-time payment in the year-ago period from one of Boingo's wireless carrier customers.

Wholesale Wi-Fi services -- in which Boingo builds and manages Wi-Fi networks to offload cell network traffic on behalf of wireless service providers -- reported 10% lower sales due to an access partnership with American Express being phased out over the last six quarters.

The far smaller segments of retail sales and advertising revenues saw sharp year-over-year declines. Low foot traffic due to the coronavirus pandemic led to low network usage and lower fees overall.

Taking advantage of empty malls and stadiums

Wholesale Wi-Fi and military/multifamily sales showed modest increases compared to the second quarter, and the DAS segment's sequential decline was just 1.5%.

Boingo's business took a hard hit from the COVID-19 pandemic over the summer, but the worst of it seems to be behind the company now. Management found some silver linings in the low foot traffic problem, too.

"As a result of the COVID-19 environment, we have made an effort to take advantage of the reduced traffic in some of our venues to build up networks faster and for a lower cost, ensuring that we are well-positioned to execute as the economy recovers," CFO Peter Hovenier said in the earnings call. "We expect the investments we are making today to generate long-term high-quality recurring cash flows over many years in the future."

Rendering of a young businessperson surveying a grayscale city with binoculars from the top of a tall building.

Is there anybody out there? Image source: Getty Images.

What about the "strategic review"?

Boingo has been exploring potential merger or buyout ideas since early March 2020. The company is talking to multiple interested parties, and the talks appear to be heating up. This was the first time Boingo's management characterized the strategic review as meeting "strong interest" from unnamed potential buyers.

The report itself was a middle-of-the-road performance. Investors who drove Boingo's stock price higher on Tuesday are banking on a buyout at the end of the strategic review rainbow, based on positive progress reviews tucked between the lines of the actual third-quarter report.

Nobody is jumping to dramatic conclusions here. Even after Tuesday's impressive jump, Boingo's stock is trading 4% lower in 2020 at $12 per share, far below the all-time highs of $35 per share at the end of 2018. Finding a deep-pocketed buyer would not only bail out Boingo's current shareholders, but also potentially supercharge the company's business model with more generous infrastructure and marketing budgets. A buyout makes plenty of sense here, and I would imagine that most of the companies exploring a combination with Boingo are found in the wireless carrier industry.

That said, merger talks are notoriously unpredictable. Boingo may be left at the altar without a ring or a flower. All things considered, I'm content to watch Boingo's quest for a buyer from the sidelines.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.