Business Aviation News

Gogo Pays Down USD$100 Million Debt

Gogo Pays Down USD$100 Million Debt

Gogo, the airborne connectivity provider for business aviation, said it will pay down USD$100 million of debt in the company’s first-quarter financial results.

The company’s revenue for the first quarter was USD$98.6 million, up 6% year-over-year, with a net income of USD$20.4 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of USD$39.7 million. The increase in revenue was attributed to strong growth in its service revenue.

The prepayment of USD$100 million will reduce Gogo’s debt to about USD$612 million and lower the company’s cash interest by approximately USD$4.5 million this year and USD$8.5 million on an annualized basis.

The transaction will strengthen the company’s financial foundation, and there are no prepayment penalties associated with this transaction.

Despite carrying long-term interest-bearing liabilities on its balance sheet, Gogo is expanding its 5G network into Canada shortly after launching its 5G network in the U.S.

While keeping an appropriate amount of debt for its business, Gogo will prioritize maintaining enough cash on hand, investing in major projects such as Gogo 5G and its low-earth-orbit-satellite-based global broadband product, according to Gogo Chairman and CEO Oakleigh Thorne.

“Channel momentum is building for our on-track launches of 5G in Q4 this year and our LEO-based Global Broadband product in the second half of 2024,” said Oakleigh Thorne, Chairman and CEO. “Business aviation demand for inflight connectivity remains robust and we expect our channel partners to make continued progress in installing our record 2022 equipment shipments.”

The company is anticipating about 50% year-over-year growth in Free Cash Flow while incurring $30 million in 5G and Global Broadband Product investments and other operational initiatives.

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