Gogo’s Earnings Call Contradictions: Galileo Deployment Delays and ATG Fleet Signals Diverge

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $222.8 million, down 1% YOY and down 2% sequentially

Guidance:

• Total revenue from equipment shipments in the second half projected to be in the range of $870 to $895 million.
• Full-year service revenue expectation is 4% of total revenue, equipment revenue is 16%.
• Adjusted EBITDA expected to be in the range of $175 to $185 million.
• Net capital expenditures expected to be in the range of $65 to $85 million.
• Free cash flow expectations revised.

Business Commentary:

Revenue and Service Trends:

• GoGo, Inc. reported total revenue of $222.8 million for Q2 2026, down 1% year-over-year and up 2% sequentially.
• Service revenue was $191.3 million, reflecting a 20% sequential increase.
• The increase in service revenue was driven by high demand and increased military and government service revenue, while equipment revenue faced a decline.

Military and Government Growth:

• Military and government service revenue saw a significant increase, up 40% compared to Q2 2025.
• This growth is attributed to governments modernizing their secure airborne communications and the company's strategic focus on expanding its exposure to mission-critical government communications.

Galileo and 5G Adoption:

• Galileo equipment shipments increased 17% sequentially, and GoGo 5G units sold rose from 508 to 138 units.
• The strong adoption of next-generation products is driven by the transition from legacy platforms and the expected decrease in C1 shipments.

Operational and Financial Challenges:

• GoGo's net loss was negative $2 million, with gross margin reflecting a $7.2 million increase in the fair value of the SATCOM direct earn-out liability.
• Financial challenges are associated with lower equipment revenue and ongoing litigation expenses, particularly from SmartSky.

Capital Allocation and Leverage:

• GoGo made a significant payment of $40 million for the SATCOM direct earn-out and reduced its net leverage ratio to 3.8 times.
• The company prioritizes debt reduction and balance sheet flexibility, targeting a leverage ratio of 2.5 times in the future.

Sentiment Analysis:

Overall Tone: Neutral

• Management stated 'Our second quarter performance met our profitability operating environment' and 'We are successfully managing the transition of our legacy ATG business while continuing to build momentum across Galileo, our sovereign 5G network, and our military and government revenue.' The tone is focused on execution and navigating expected pressures, with no strong positive or negative indicators.

Q&A:

• Question from Scott Serrell (Roth Capital Partners): Update on the pipeline for Galileo units to be AOL by the end of the year and color on the MilGov opportunity, including dollars, percentage of mix, and incremental AOL potential.
  Response: Galileo units online are in the mid-500s at the high end. The MilGov opportunity is global, driven by government modernization; it is too early to quantify the mix percentage, but management is extremely encouraged and enthusiastic about this growth vector.

• Question from Scott Serrell (Roth Capital Partners): Clarification on normalized OPEX going forward, including the impact of SmartSky litigation expense and peak non-GAAP op-ed as litigation is pulled into 2027.
  Response: Normalized OPEX is in the high 40s; sales and marketing will be flat, G&A will include SmartSky litigation expense, with a pop in Q2.

• Question from Justin Lane (Morgan Stanley): Further color on the drivers of the updated guidance, specifically lower equipment sales expectations and service requirements.
  Response: The single biggest driver of the revised guidance is lower equipment revenue, assumed at almost break-even margins. Service revenue remained consistent despite ATG pressures due to strength in Leo products and OEM contracts.

• Question from Justin Lane (Morgan Stanley): Update on the number of ATG aircraft online, expected roll-off, and related GEO units.
  Response: Total ATG aircraft online are approximately 1,200, including 5G. GEO units online are stable; a small number of deactivations are expected, primarily driven by aircraft sales, not customer turn-offs.

• Question from Justin Lane (Morgan Stanley): Progress on the drone opportunity and any milestones to watch.
  Response: GoGo is already involved in drone projects with GEO and is expanding into Galileo and 5G; product development and proof of concepts are underway, with traction seen in the U.S. and overseas markets.

Contradiction Point 1

Galileo Airborne Online (AOL) Unit Expectations

Contradiction on the expected number of Galileo units to be online by year-end.

Scott Serrell (Roth Capital Partners) - Scott Serrell (Roth Capital Partners)

2026Q2: The model assumes a high-end total of mid-500s Galileo units online. - Chris Moore(CEO) and Zach Kotner(CFO)

Can you provide an update on the Galileo units expected to be Airborne Online by year-end (previously 600), including the 5G aircraft pipeline, and offer additional details on the MilGov opportunity’s dollar/percentage mix, future growth, and incremental AOL potential? - Scott Searle (Roth Capital Partners)

2026Q1: Current Galileo shipments are with MROs, with a significant ramp expected from OEM installations starting in Q3 and Q4. - Chris Moore(CEO)

Contradiction Point 2

ATG Aircraft Online Trends

Contradiction on the reported trend of ATG aircraft online, specifically regarding net changes and the impact of aircraft sales.

Justin Lane (Morgan Stanley) - Justin Lane (Morgan Stanley)

2026Q2: Net upgrades to new products (Galileo, 5G) which offset some deactivations... The base was “pretty flat” from Q1. - Zach Kotner(CFO) and Chris Moore(CEO)

Will the deactivation (roll-off) of ATG aircraft continue through the year, and is a taper expected in the back half? - Gabrielle Knafelman (Morgan Stanley) [on behalf of Justin Lang]

2026Q1: GEO aircraft online (AOL) performance was exactly as expected, with a decline of 15 units, largely due to aircraft sales in the quarter. - Zach Cotner(CFO)

Contradiction Point 3

Military/Government (MilGov) Business Growth and Revenue Mix

Contradiction on the expected pace and quantifiable impact of MilGov revenue.

Scott Serrell (Roth Capital Partners) - Scott Serrell (Roth Capital Partners)

2026Q2: This is a **global growth vector**... It is too early to quantify the future mix percentage, but management is **'extremely encouraged.'** - Chris Moore and Zach Kotner

Can you provide an update on the Galileo units expected to be Airborne Online by year-end (previously 600), the 5G aircraft, and the MilGov opportunity's dollar and percentage mix, future growth, and incremental AOL potential? - Scott Searle (ROTH Capital Partners)

2025Q4: Military and government revenue growth is **expected to outpace overall company growth in 2026**. The mix will continue to improve... - Christopher Moore and Zachary Cotner

Contradiction Point 4

ATG Aircraft Fleet Online Trend

Contradiction on whether the ATG fleet online is declining, stable, or increasing.

Justin Lane (Morgan Stanley) - Justin Lane (Morgan Stanley)

2026Q2: The biggest driver of any decrease is still **aircraft sales**, not just turn-offs... the base was **'pretty flat' from Q1**. - Zach Kotner(CFO) and Chris Moore(CEO)

Will the deactivation of ATG aircraft continue through the year, and does it taper in the back half? - Justin Lang (Morgan Stanley)

2025Q3: The decline is largely due to the **nature of scheduled maintenance and upgrades**. - Chris Moore(CEO)

Contradiction Point 5

Progress and Momentum of the C1 Upgrade Program

Contradiction on whether the C1 upgrade program is gaining momentum or facing challenges.

Justin Lane (Morgan Stanley) - Justin Lane (Morgan Stanley)

2026Q2: The biggest driver of any decrease is still **aircraft sales**, not just turn-offs. - Zach Kotner(CFO) and Chris Moore(CEO)

What is the update on ATG aircraft trends, particularly regarding the continuation and potential tapering of deactivations (roll-off) throughout the year? - Scott Searle (ROTH Capital Partners)

2025Q3: Encouragingly, **MRO partners are derisking the process**, and field service teams are active, leading to **positive momentum**. - Chris Moore(CEO)