Gogo reels in record revenue of $404m
Inflight connectivity firm Gogo Business Aviation increased its revenue last year by a fifth, achieving a record $404m during its full year results for 2022.
The rise in turnover was “fueled by strong growth in both service and equipment revenue” according to the company’s full-year accounts.
Net income fell to $92m from $157m in 2021, but Gogo said this was due in part to 2021 including a $187m tax benefit.
“We believe the strong demand we’re seeing is a result of a structural change in business aviation passenger demand, evidenced by Gogo flight counts being up 31% for the fourth quarter compared with pre-Covid 2019,” Oakley Thorne, chairman and CEO, Gogo said on an investor conference call.
He said the change was driven by fliers who tried private aviation during the pandemic and stuck, alongside a shift in passenger demographics with younger generations having more demand for high bandwidth onboard. “The impact of that increase in demand is evident in Gogo data consumption,” he added. “Consumption per passenger hour grew 17% year-over-year in the fourth quarter and was up 50% from 2019 for the full year.”
Cash flow for the full year increased to $57.8m, up from $49.4m in 2021. Barry Rowan, executive vice president and chief financial officer (CFO)said he expects cashflow to “accelerate substantially” from 2025 onwards, once strategic investment projects such as the firm’s 5G offering and Gogo Global Broadband (GBB) are completed. Gogo’s 5G offering is “on track” to launch commercially in December this year, according to the company.
“We anticipated that 2022 would be an investment year for Gogo,” said Rowan. “It was, but not to the extent we originally planned, due to the pushing out of Gogo 5G expenses. We expect 2023 and 2024 to continue to be investment years as we complete our 5G programme and ramp spending for GBB.”
Gogo’s guidance for this year shows an expected revenue of $440m to $455m, with free cash flow between $80-90m. Jessie Betjemann, senior vice president and soon to be new CFO , said: “We anticipate that 2023 will be a strong year for aircraft online growth, as the record equipment units we shipped in 2022 are activated, translating into strong service growth.”
Gogo Q4 results – at a glance
- Revenue: $108.2m, up 17%
- Total aircraft online: 6.935, up 8%
- Adjusted EBITDA: $46.2m, up 17%
- Free cash flow: Down from $25.7m to $25m
Gogo full-year 2022 results – at a glance
- Revenue: $404m, up 20%
- Adjusted EBITDA: $173.8m, up 15%
- Free cash flow: Up to $57.8m from $49.4m
