BROOMFIELD, Colo. - Gogo (NASDAQ:GOGO) Business Aviation (NASDAQ: GOGO) has secured contracts to complete 25 Supplemental Type Certificates (STCs), expanding its Gogo Galileo HDX broadband connectivity to a wide array of business aircraft. The STCs, which are expected to be completed in 2025, will enable Gogo to offer its services to over 18,000 aircraft worldwide, many of which have not previously had access to broadband inflight connectivity.
The certification process will be supported by Gogo's global dealer network, which spans North America, Europe, and South America. The targeted airframes range from super-light jets to ultra-long-range large-cabin aircraft, including models from Bombardier (OTC:BDRBF), Embraer, Gulfstream, HondaJet, King Air, Learjet, Pilatus, Textron (NYSE:TXT), and Beechcraft Hawker.
Gogo's president and chief operating officer, Sergio Aguirre, stated that the response from their dealer network reflects the strong demand for Gogo Galileo in the industry, allowing customers to access true aviation-grade broadband connectivity.
The HDX antenna, designed for any size business aircraft, offers peak speeds up to 60 Mbps. This service, which is anticipated to launch later this year, will be supported by Eutelsat OneWeb's Low-Earth-Orbit network, promising low variability and consistent performance for global routes.
Gogo is also offering a $25,000 promotional rebate for a limited time to current customers who upgrade to AVANCE SCS and HDX from legacy air-to-ground systems.
As of June 30, 2024, Gogo reported that 7,031 business aircraft were flying with its broadband ATG systems, and 4,247 aircraft had narrowband satellite connectivity installed.
This expansion is part of Gogo's broader strategy to enhance connectivity in the business aviation market, as the company continues discussions with aircraft manufacturers for additional aftermarket STCs and service bulletins. The information for this article is based on a press release statement from Gogo Business Aviation.
In other recent news, Gogo Inc . has made significant strides in the aviation communications sector. The company has committed $52.5 million to its partnership with Eutelsat OneWeb, leveraging the latter's low earth orbit satellite network to enhance its service offerings. This financial commitment is expected to fortify Gogo's market position and enhance its competitive edge in the industry.
In terms of financial performance, Gogo reported a slight 1% decrease in total revenue for the second quarter of 2024, amounting to $102.1 million, primarily due to a decline in equipment revenue. However, the company's service revenue saw a 4% increase, hitting a record high of $81.9 million. Roth/MKM maintains its buy rating on Gogo shares, maintaining a steady stock price target of $15.50.
The company has also entered into a multi-year agreement with Airshare, a rapidly expanding private aviation operator, offering advanced in-flight connectivity options. Furthermore, Gogo has partnered with Skyservice Business Aviation to secure Supplemental Type Certificates for its Gogo 5G service, aiming to enhance in-flight entertainment and connectivity across North America. Despite the delay in the launch of Gogo 5G to the second quarter of 2025, Gogo Inc. has updated its 2024 financial guidance, anticipating revenue ranging from $400 million to $410 million. These are the recent developments concerning Gogo Inc.
InvestingPro Insights
As Gogo Business Aviation (NASDAQ: GOGO) embarks on its ambitious project to expand broadband connectivity to thousands of business aircraft, investors are keeping a close eye on the company's financial health and market performance. According to InvestingPro data, Gogo's market capitalization stands at a robust $840.42 million. This valuation reflects investor confidence in Gogo's market position and growth prospects.
Despite a challenging environment, Gogo has demonstrated financial resilience. The company's P/E ratio, which is a measure of its current share price relative to its per-share earnings, is 13.07, indicating a potentially favorable valuation compared to industry peers. Moreover, Gogo's price to book ratio, a comparison of a firm's market value to its book value, is relatively high at 16.16, suggesting that investors are willing to pay a premium for the company's assets and future growth potential.
InvestingPro Tips highlight that Gogo has been profitable over the last twelve months, which is a positive sign for investors looking for stable earnings. Additionally, it’s worth noting that the company's liquid assets exceed its short-term obligations, providing a cushion for operational needs or unexpected expenses. For those seeking more in-depth analysis, InvestingPro offers additional tips on Gogo, which can be accessed at the InvestingPro platform.
An important consideration for investors is the company's stock performance. Over the last month, Gogo's stock has faced headwinds, as indicated by a price total return of -16.2%. This short-term volatility could be an opportunity for investors to consider the company's long-term value proposition against current market dynamics.
To gain further insight into Gogo's financials and receive more InvestingPro Tips, investors can visit https://www.investing.com/pro/GOGO, where additional 7 tips are available, offering a comprehensive understanding of the company's investment potential.
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