Gogo Inc. experienced a dramatic selloff after the inflight internet provider reported disappointing quarterly earnings that fell significantly short of market expectations. The company’s shares plummeted approximately 18% following the announcement of an unexpected $1.9 million loss, despite achieving record revenue figures.
Record Revenue Overshadowed by Profit Shortfall
The third quarter presented a contradictory performance picture for the aviation connectivity specialist. While Gogo’s revenue surged to $223.59 million, representing a remarkable 122% year-over-year increase and exceeding analyst projections, the bottom line told a different story. The company reported a loss per share of $0.01, dramatically missing the anticipated earnings range of $0.08 to $0.11 per share that market experts had forecasted.
Key financial metrics from the quarter include:
* Net loss totaling $1.9 million
* Adjusted EBITDA of $56.2 million, reflecting 61% annual growth
* Free cash flow generation of $30.6 million
* Record installation of 437 ATG units for aircraft connectivity
Market Reaction and Analyst Revisions
The financial markets responded swiftly to the earnings disappointment, with Gogo’s stock price collapsing 18.04% to $7.55 during pre-market trading. The equity showed minimal recovery, stabilizing around $7.64 in subsequent trading sessions.
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Financial institutions promptly adjusted their outlooks for the company:
* William Blair reduced their 2026 EPS estimate from $0.59 to $0.58
* Roth Capital downgraded their 2025 earnings projection from $0.44 to $0.32 per share
* Morgan Stanley initiated coverage with an “Equal Weight” rating and $15 price target
* The consensus analyst rating stands at “Hold” with an average price target of $14.83
Strategic Outlook: 5G Expansion as Growth Catalyst
Despite the quarterly setback, Gogo management reaffirmed their full-year guidance, maintaining expectations for $870-$910 million in total revenue and $200-$220 million in adjusted EBITDA. The company’s strategic focus remains centered on its forthcoming 5G network deployment, scheduled for completion by the end of 2025.
Recent developments provide some encouragement, with the successful completion of a comprehensive test flight utilizing the 5G network infrastructure. Additionally, the company secured a substantial five-year contract with a U.S. government agency. However, executives cautioned investors to anticipate decreased EBITDA in the fourth quarter as the company accelerates investment in both 5G and Galileo initiatives. The upcoming HDX and FDX terminal platforms, expected to launch in 2026, are projected to deliver enhanced profit margins.
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