Gogo ups targets
September 30, 2021
By Chris Forrester
In-flight connectivity company Gogo says it has increased its long-term financial targets. Gogo supplies the business aviation community with broadband services by satellite.
As of June 30th 2021, Gogo reported 2,067 business aircraft flying with Gogo’s AVANCE L5 or L3 system installed, 6,036 aircraft flying with its ATG systems onboard, and 4,587 aircraft with satellite connectivity installed.
“Growth in private air travel continues to expand, fueling what we expect will be sustained growth in demand for inflight connectivity as customers seek to replicate their home and office connectivity in the air,” said Oakleigh Thorne, Chairman and CEO of Gogo. “That has driven record equipment sales at Gogo and is expected to generate growth in high-margin service revenue through our 2025 planning horizon. We recently updated our long-term financial model to reflect the impact of our plans to capitalise on these trends and we look forward to discussing them on our upcoming investor call.”
Those revised targets are significant:
- Revenue growth at a compounded annual growth rate of approximately 15 per cent from 2020 to 2025 (versus prior target of at least 10 per cent)
- Annual Adjusted EBITDA margin rising from 40 per cent in 2021 to 45 per cent in 2025 (versus prior target of 35 per cent – 40 per cent)
- Free Cash Flow of approximately $125 million in 2023, following the deployment of the Gogo 5G network in 2022, and approximately $200 million in 2025 (versus prior target of more than $100 million in 2023 with significant Free Cash Flow growth thereafter)