BROOMFIELD, Colo. - Gogo (NASDAQ:GOGO) Business Aviation (NASDAQ: GOGO) has announced the completion of the first installation of its Gogo Galileo HDX system on a Bombardier (OTC:BDRBF) Challenger 300, marking a significant step toward the commercial launch of its new Low-Earth-Orbit (LEO) global broadband solution. The installation and subsequent flight testing are part of Gogo's preparation for the system's expected rollout in the fourth quarter of this year.
The installation process, conducted in partnership with Duncan Aviation, involved adding a fuselage-mounted antenna to the aircraft, connecting power and data lines to the already-installed AVANCE L5 LRU. Mark Winter, Duncan Aviation Houston Satellite Manager, highlighted the system's impressive performance during ground tests with multiple devices streaming simultaneously.
Gogo is now progressing to further testing phases to refine the system's performance and reliability. This includes electromagnetic interference (EMI) ground testing, vibration and buffeting tests, as well as an extensive flight-testing campaign.
Sergio Aguirre, president and COO of Gogo, expressed confidence in the on-schedule and on-budget progress of Gogo Galileo HDX. Customers are expected to benefit from highly reliable service on the Eutelsat OneWeb enterprise-grade LEO satellite network, which offers dedicated bandwidth for business users.
The company's second-quarter earnings report revealed eight committed Supplemental Type Certificate (STC) programs for Gogo Galileo HDX, covering 5,318 aircraft, and an additional 21 STC agreements in process for another 12,267 aircraft. The HDX antenna boasts mean speeds of 57 Mbps and peak speeds up to 60 Mbps. A more advanced FDX antenna is slated for release in the first half of 2025, targeting larger aircraft with even higher speeds.
Gogo has opened its order books for the new system, providing equipment pricing and service plans on its website. A $25,000 rebate is available for existing Gogo customers upgrading from legacy air-to-ground systems when installing Gogo AVANCE SCS and HDX.
The company, known for providing broadband connectivity services to the business aviation market, reported 7,031 business aircraft with its broadband ATG systems onboard as of June 30, 2024. Gogo's services are widely used across various business aircraft, from turboprops to large global jets.
This announcement is based on a press release statement from Gogo Business Aviation.
In other recent news, Gogo Inc . has reported a 1% decrease in total revenue in 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, reaching a record high of $81.9 million. Despite a 31% decrease in adjusted EBITDA, which amounted to $30.4 million, Gogo Inc. remains optimistic about its future prospects.
Gogo has also announced a partnership 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. The company is set to introduce the Gogo Galileo product in 2025, which is expected to significantly contribute to revenue.
Gogo Inc. has updated its 2024 financial guidance, anticipating revenue ranging from $400 million to $410 million. However, the launch of Gogo 5G has been delayed to the second quarter of 2025. These are the most recent developments for Gogo Inc.
InvestingPro Insights
As Gogo Business Aviation (NASDAQ: GOGO) gears up for the commercial launch of its Gogo Galileo HDX system, investors are closely monitoring the company's financial health and market performance. According to recent data from InvestingPro, Gogo's market capitalization stands at $957.22 million, reflecting the market's valuation of the company. Despite expectations of net income declining this year, as per one of the InvestingPro Tips, Gogo's liquid assets are reported to exceed its short-term obligations, indicating a solid liquidity position that could support its ongoing projects and operational needs.
The company's P/E ratio, a measure of its current share price relative to its per-share earnings, is 14.72, with an adjusted P/E ratio over the last twelve months as of Q2 2024 at 14.35. This suggests that investors are willing to pay about $14.72 for every dollar of earnings, which is a factor to consider when evaluating the company's stock value. Moreover, Gogo's price/book ratio during the same period is 18.4, which is on the higher side and might indicate that the stock is trading at a premium relative to its book value.
InvestingPro Tips also reveal that analysts predict Gogo will be profitable this year, and the company has been profitable over the last twelve months. This optimism is tempered by the fact that the stock price has fallen significantly over the last three months, with a 22.75% drop. It's noteworthy that Gogo does not pay a dividend to shareholders, which could be a consideration for income-focused investors.
For investors seeking a deeper dive into Gogo's financials and future outlook, there are additional InvestingPro Tips available on InvestingPro's website. These insights could provide valuable context for the company's strategic moves, including the development of its LEO global broadband solution and its potential impact on Gogo's market position.
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