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Gogo Inc. held its Second Quarter 2023 Earnings Conference Call on August 7, 2023. The results for the quarter were not up to the company’s expectations. Though there were some positive achievements, such as strong new activations and the AVANCE platform accounting for more than 50% of the installed base, there were also challenges. Gogo experienced unusually high suspensions and a delay in the delivery of its 5G chip. As a result, the company has revised its guidance for the year and its long-term model.

Gogo remains optimistic about its future growth, emphasizing its position in an unpenetrated market with a high demand for broadband solutions in business aircraft. The company sees unprecedented demand as more travelers choose private aviation, particularly following the COVID-19 pandemic, and seek connectivity. Gogo has a recurring service revenue model that generates strong cash flow and plans to incorporate new technologies to expand its market and enhance its competitive position.

CEO Oakleigh Thorne highlighted Gogo’s 2-year investment cycle, which includes the development of Gogo 5G, Gogo Galileo, and the FCC rip and replace project. Thorne explained that many of the challenges faced by the company are temporary in nature and provided data to support this claim. Despite a slight decline in flight counts compared to the previous year, there was strong growth compared to pre-COVID levels. Additionally, usage per flight hour showed a significant increase, indicating the growing demand for WiFi connectivity on aircraft.

In terms of financials, Gogo reported a record service revenue for the quarter, although growth slowed due to suspensions affecting aircraft online. Average revenue per aircraft remained relatively flat. The company’s guidance update reflects the impact of suspensions and the delay in the 5G chip delivery.

Gogo remains committed to its strategic initiatives and its long-term vision for growth. Chairman and CEO Oakleigh Thorne and Executive Vice President and CFO Jessi Betjemann provided further details on the company’s performance and rationale behind the guidance update.

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