BROOMFIELD, Colo. - Gogo (NASDAQ:GOGO) Business Aviation (NASDAQ: GOGO) has achieved a significant milestone with its Gogo Galileo HDX antenna by successfully passing the Federal Aviation Administration's (FAA) DO-160 qualification testing, it was announced today. This testing is a critical step toward the antenna's commercial launch, slated for later this year, and ensures its safety under the rigorous conditions of flight.
The DO-160 standard is a comprehensive suite of tests that certify the durability and reliability of onboard equipment, assessing factors such as temperature volatility, vibration, and exposure to radio waves, lightning, and moisture. Gogo's vice president of airborne product engineering, Jeremy Tyler, stated that meeting these standards keeps the company on track to obtain the Supplemental Type Certificate (STC) necessary for the Galileo HDX antenna's commercial introduction.
Developed in collaboration with Hughes Network (LON:NETW) Systems, LLC, an EchoStar company (NASDAQ: SATS), the Gogo Galileo HDX is designed to connect business aircraft of all sizes to Low Earth Orbit (LEO) satellite networks. It is capable of peak speeds approaching 60 Mbps. The company also plans to release the Gogo Galileo FDX for larger aircraft, targeting peak speeds of nearly 200 Mbps, in the second quarter of 2025.
The Galileo HDX will interface with the Eutelsat OneWeb LEO satellite network, which is tailored for consistent performance and low variability across global routes. With the industry experiencing high demand for the HDX, Gogo's dealers have already contracted for 27 STCs, covering a potential market of over 18,000 aircraft worldwide.
Gogo is currently accepting purchase orders for the HDX, positioning it as a cost-effective and faster alternative to competitive ESA LEO systems for upgrading any AVANCE system, including AVANCE L3, L5, LX5, and SCS.
As a leader in broadband connectivity services for business aviation, Gogo offers a range of smart cabin systems for connectivity, entertainment, and voice solutions. As of June 30, 2024, the company reported 7,031 business aircraft equipped with its broadband ATG systems, with 4,215 flying with a Gogo AVANCE L5 or L3 system, and 4,247 aircraft with narrowband satellite connectivity.
This announcement, based on a press release statement, indicates Gogo's ongoing commitment to enhancing in-flight connectivity options for business aviation, although it is important to note that forward-looking statements inherently carry risks and uncertainties.
In other recent news, Gogo Inc . has announced significant steps in its growth strategy, including a definitive agreement to acquire Satcom Direct. This $410 million acquisition is expected to position Gogo as the only global in-flight connectivity provider and is projected to generate $485 million in revenue by 2024. Analysts from Roth/MKM have maintained their buy rating on Gogo shares, indicating a positive outlook for the company's financials.
Expanding its service offerings, Gogo has committed $52.5 million to its partnership with Eutelsat OneWeb and secured contracts to complete 25 Supplemental Type Certificates, extending its broadband connectivity to more business aircraft. Despite a slight 1% decrease in total revenue for the second quarter of 2024, amounting to $102.1 million, Gogo's service revenue saw a 4% increase, reaching a record high of $81.9 million.
In collaboration with Textron (NYSE:TXT) Aviation, Gogo's Galileo HDX will be factory-installed in Cessna Citation Longitude, Citation Latitude, and Citation Ascend business jets. Private aviation company Wheels Up has also announced a partnership with Gogo to install the Gogo Galileo HDX satellite Wi-Fi system across its entire fleet, with installations slated to commence by mid-2025. These are some of the recent developments for Gogo Inc. and its partners.
InvestingPro Insights
Gogo's recent achievement in passing the FAA's DO-160 qualification testing for its Galileo HDX antenna aligns with the company's financial position and market performance. According to InvestingPro data, Gogo has a market capitalization of $845.5 million, reflecting its significant presence in the business aviation connectivity sector.
The company's focus on innovation and product development is crucial, especially considering that its revenue for the last twelve months as of Q2 2023 stood at $402.14 million, with a slight revenue decline of 3.17% over the same period. This emphasis on new technologies like the Galileo HDX antenna could help Gogo address this revenue challenge and potentially drive growth in the future.
InvestingPro Tips highlight that Gogo's liquid assets exceed its short-term obligations, indicating a strong financial position to support its ongoing development and certification efforts. This financial stability is particularly important as the company prepares for the commercial launch of the Galileo HDX antenna later this year.
Despite recent market volatility, with the stock taking a significant hit over the last week (-7.76% 1-week price return), Gogo maintains a solid profitability profile. The company's operating income margin stands at an impressive 28.48% for the last twelve months as of Q2 2023, demonstrating efficient operations even as it invests in new technologies.
It's worth noting that analysts predict Gogo will remain profitable this year, which bodes well for the company's ability to continue funding its innovation pipeline, including the upcoming Galileo FDX antenna planned for 2025.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights beyond those mentioned here. In fact, there are 6 more InvestingPro Tips available for Gogo, providing a deeper understanding of the company's financial health and market position.
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