Gogo announces strong first-quarter results with record revenue for business aviation. Photo Credit: Gogo

Gogo, a global provider of broadband connectivity products and services for aviation, has announced its financial results for the first quarter ended March 31. The results reflect the adoption of the new revenue recognition standard, ASC 606, and the transition of one of its airline partners to the airline-directed model, which resulted in the recognition of $45.4 million of incremental equipment revenue and $19.3 million of incremental net income.

Consolidated revenue increased to $231.8 million, up 40 percent from 2017. Service revenue increased to $150.7 million, up 3 percent, and equipment revenue increased to $81.1 million, up 329 percent. Excluding the $45.4 million accounting impact of incremental equipment revenue, consolidated revenue increased to $186.4 million, up 13 percent, and equipment revenue increased to $35.7 million, up 89 percent.

Net loss decreased to $27.4 million, down 34 percent, primarily due to the $19.3 million accounting impact of incremental net income. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), which excludes the accounting impact of the incremental net income, increased to $11.9 million, up 11 percent from 2017. Capital expenditures (capex) decreased to $62.7 million from $71.6 million in the 2017 period and cash capex decreased to $56.8 million from $58.7 million in 2017.

In business aviation, total revenue increased to a record $68.8 million, up 22 percent. Service revenue increased to $47.7 million, up 19 percent. Equipment revenue increased to $21.2 million, up 30 percent. Segment profit increased to $32.3 million, up 24 percent, with segment profit margin expanding to a record 47 percent for the quarter.