Gogo saw revenue increase in 2016 compared to 2015, according to its recent fourth quarter and full-year 2016 financial results. Gogo projects another increase at the end of 2017.
Below are highlights from the reported consolidated results:
Gogo’s Fourth Quarter 2016 Financial results
- Revenue increased to $160.0 million, up 16% from Q4 2015.
- Service revenue increased to $138.9 million, up 20% from Q4 2015. This was driven by a 14% increase in commercial aircraft online to 2,943; a 20% increase in ATG business aircraft online to 4,172; and increased customer usage across all segments.
- Net loss decreased to $26.9 million, an improvement from a loss of $33.9 million in Q4 2015.
- Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased to a record $23.1 million, up 187% from Q4 2015.
- Capital expenditures increased to $48.2 million from $35.4 million in Q4 2015.
- Revenue in Commercial Aviation for North America increased to $101.1 million, up 20% from Q4 2015, driven primarily by an increase in aircraft online. Segment profit increased to $24.9 million, up 171% from Q4 2015.
- Commercial aircraft online in North America increased to 2,676, up 47 aircraft from September 30, 2016, and included 59 2Ku and more than 1,700 ATG-4 equipped aircraft.
- Total revenue for Commercial Aviation – Rest of World increased to $7.4 million, up 76% from Q4 2015, driven primarily by an increase in aircraft online and higher revenue per aircraft.
- Aircraft online in Commercial Aviation – Rest of World increased to 267, up 65 aircraft from Q4 2015. Commercial Aviation – Rest of World had approximately 560 net new 2Ku awarded but not yet installed aircraft as of December 31, 2016.
- Segment loss for Commercial Aviation – Rest of World increased to $24.7 million from $20.2 million in Q4 2015, primarily due to higher engineering, design and development expenses related to the roll out of 2Ku and increased satellite capacity costs in advance of new airline partner launches.
- Total revenue in the Business Aviation segment increased to $51.5 million, up 4% from Q4 2015.
- Equipment revenue in the Business segment decreased to $15.1 million, down $6.0 million from Q4 2015, driven by the deferral of $2.7 million of GogoBiz equipment revenue.
Gogo’s Full-Year 2016 Financial Results
- Gogo brought more than 350 commercial aircraft and nearly 700 ATG business aircraft online in 2016.
- Revenue increased to $596.6 million, up 19% from $500.9 million in 2015. Service revenue increased to $514.3 million, up 22% from $420.0 million in 2015.
- Commercial Aviation in North America revenue increased to $371.5 million, up 20% from $310.7 million in 2015.
- Commercial Aviation – Rest of World revenue increased to $25.4 million, up 119% from $11.6 million in 2015.
- Business Aviation revenue increased to $199.6 million, up 12% from $178.7 million in 2015.
Gogo says it is hoping for revenue growth of between 12% and 17% in 2017 compared to 2016. This could bring total revenue to $695 million by the end of 2017. The business segment that would be responsible for contributing the most growth is Commercial Aviation North America, which is projected to see a jump of $20 million in revenue from 2016 to 2017.
"2Ku performance demonstrates industry leading speed, coverage. and service availability, and we now have more than 130 2Ku aircraft installed. We are increasing 2Ku installation guidance to 450 to 550 aircraft in 2017 and 650 to 750 in 2018," says Michael Small, Gogo's president and CEO.
"With accelerated 2Ku installations and improved operating leverage, we now expect to become free cash flow positive in 2019, a year earlier than our prior guidance," says Gogo's Executive Vice President and CFO Norman Smagley.