Gogo's Q1 2025: Unpacking Contradictions in 5G Launch, ATG Performance, and Tariff Impacts

5G product launch timeline, ATG units online decline, tariff impact on financials, ATG AOL decline and 5G impact, and 5G launch timeline are the key contradictions discussed in Gogo's latest 2025Q1 earnings call.



Strong Q1 Performance and Synergy Realization:
- Gogo Inc. delivered a quarter that exceeded plans and consensus, with strong results driven by service revenues, earlier-than-expected synergy realization, and deferral of some expenses related to new product investments.
- The company achieved a substantial increase in GEO aircraft online to 1,280, up 2.5% from 2024 year-end and 16% from Q1 2024.
- This growth was supported by line-fit offerings, which are advantageous as customers seek to optimize bandwidth, redundancy, and coverage.

Significant Milestones in Product Development:
- Gogo received PMA approvals for its HDX and FDX Galileo antennas, enabling shipping of products and development of STCs.
- The FDX PMA approval came ahead of schedule, and 10 STCs are already queued, demonstrating rapid progress.
- These approvals pave the way for a successful rollout and increased market reach.

Potential Impact of Tariffs:
- Gogo indicated modest exposure to tariffs and expects to absorb the impact within current guidance.
- The impact is primarily related to manufacturing costs, with most manufacturing conducted in the United States.
- Despite fluidity in tariff situations, the company remains adaptable to potential changes in the tariff environment.

Market Demand and Strategic Initiatives:
- Gogo's business aviation sector presents an opportunity with about a third of business jets worldwide having any connectivity, indicating substantial unmet demand.
- The company's integration with Satcom Direct has expanded its global presence and access to new markets, positioning Gogo as the only IFC company offering multi-orbit GEO/LEO air-to-ground broadband solutions.
- Strategic initiatives include leveraging the Eutelsat OneWeb LEO network and integrating Galileo compact flat panel antennas to broaden product offerings and capture new market segments.