Gogo Inc. Q1 FY2025 earnings call

Chris Moore highlighted the progress in merging Gogo and Satcom Direct, with significant milestones such as PMA approval for HDX and FDX Galileo antennas, execution of new OEM agreements, confirmation of 5G chip fabrication, and growth in the number of aircraft online optimizing RGO satellite services. Over 85% of the targeted synergy savings have already been realized. The business aviation sector presents a significant opportunity for increased broadband connectivity usage with unmet demand. The milgov mobility market also shows strong demand. Key strategic initiatives include progress with LEO and GEO products, 5G chip fabrication, and the FCC rip and replace program.

Total ATG aircraft online at the end of Q1 was 6,902, a decline of ~3% year - over - year and ~2% quarter - over - quarter. Advanced AOL reached 4,716, up 15% year - over - year, comprising 68% of the total AT fleet. Total ATG ARPU was $3,451. Total broadband GEO AOL, excluding end - of - life networks, reached 1,280, up 79 aircraft and 16% year - over - year. Equipment revenue in the first quarter was $31.7 million, up 40% year - over - year and 67% quarter - over - quarter.

Gogo reiterated 2025 financial guidance. Total revenue is expected to be in the range of $870 million to $910 million. Adjusted EBITDA is expected to be in the range of $200 million to $220 million. Free cash flow is expected to be in the range of $60 million to $90 million. 2025 is expected to be the trough of free cash flow.

Potential impact of current and proposed tariffs on the business. There is modest exposure to tariffs, but the company believes it can absorb the tariff impact within current guidance.

Q: Brent Pinter asked about the dollar amount of tariff impact baked into guidance.

A: Zac Cotner said it's about $5 million, with about half related to EBITDA and half to working capital, mainly from inventory purchases.

Q: Sebastiano Petti asked about the breakdown of Satcom's 10% growth in Q1 and the competitive landscape of geo broadband.

A: Zac Cotner mentioned the majority of growth was related to geo broadband. Chris Moore discussed competitive aspects and the opportunities of Galileo.

Q: Scott Searle asked about 5G chip milestones and the Galileo competitive landscape.

A: Chris Moore talked about the stages of 5G chip fabrication and Galileo's market success.

Q: Justin Lang asked about trends in the Milgov business.

A: Chris Moore discussed overseas opportunities and the DOD's tech refresh.

Q: Louie DiPalma asked about 2025 costs and HDX performance.

A: Zac Cotner discussed the cost breakdown and Chris Moore talked about HDX performance and comparisons with competitive products.