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- **New Product Momentum**: 1,000+ aircraft pipeline for HDX/5G, VistaJet deal for 270 aircraft, and 5G launch in Q4 2025.
- **Financial Strength**: $94M free cash flow YTD, reiterating $200-220M EBITDA guidance, and FCC reimbursements covering 80% of CapEx.
- **Growth Catalysts**: 5G ARPU 2x Classic, HDX/FDX installations ramping in 2026, and gov contracts targeting 20%+ revenue mix.
- **Near-Term Challenges**: Q4 EBITDA down 27% QoQ due to 5G testing costs and ATG AOL decline, but 2026 free cash flow growth expected.

**【CEO Opening Remarks】**
- Highlighted progress on new products (5G, HDX, FDX) and global contract wins, positioning Gogo for long-term growth.
- Emphasized strong demand trends in business aviation (30% above pre-COVID levels) and underpenetrated market (25% broadband adoption globally).
- Highlighted VistaJet deal (270 aircraft upgrades) and pipeline growth (1,000+ aircraft across HDX/5G, up 100% YoY), with 60% U.S. mix.

**【CEO Product Updates】**
- **HDX**: 19 STCs completed (vs. 8 in Q2), 200 units shipped YTD (3x Q2), 50 installations underway. Targeting 2026 ramp for AOL growth.
- **FDX**: Flight tests achieved 200 Mbps speeds, 36GB data in 36 mins. Announced line-fit with Bombardier for 2027+ revenue.
- **5G**: Flight testing exceeded expectations, Q4 launch confirmed. 400 pre-provisioned customers to begin service in Q1 2026.
- **LTE Upgrade**: 437 equipment shipments (record high), 145 Classic-to-AVANCE upgrades. AVANCE AOL at 75% of fleet, targeting 100% by 2026.

**【CEO Military/Gov Update】**
- 13% of revenue from gov contracts, targeting 20%+ long-term. Won 5-year federal contract for multi-orbit services and $33M SES Space & Defense deal.

**【CFO Financial Summary】**
- Q3 Revenue: $224M (down 1% YoY). Service Revenue: $190M (up 132% YoY). Adjusted EBITDA: $56.2M (25% margin).
- Free Cash Flow: $31M (Q3) / $94M (YTD). Reiterating 2025 Guidance: Revenue $870-910M, EBITDA $200-220M, Free Cash Flow $60-90M.
- Key Drivers: Equipment revenue up 80% YoY, 5G/Galileo investments ($6M/5G, $1.2M Galileo OpEx), FCC reimbursements ($6.6M Q3).
- Challenges: ATG AOL decline (7% YoY) due to Classic fleet attrition, 5G launch costs (~$40M 2025).

**【Q&A Highlights】**
- **Q4 EBITDA Guidance**: ~$40M (down 27% QoQ) due to ATG margin pressure, 5G testing costs, and inventory build.
- **Classic Transition**: 1,100 Classic aircraft remain uncommitted. C1 upgrades (3x faster than Classic) and 5G line-fits will drive ARPU uplift (5G ARPU 2x Classic).
- **ARPU Outlook**: 2026 ARPU stabilization as 5G/5G+ adoption accelerates (50-80Mbps speeds vs. 5Mbps Classic).
- **Gov Shutdown Impact**: Minimal on FCC reimbursements, but potential delays in military contract approvals.


Gogo Inc. (GOGO) Q3 2025 Earnings Call Transcript

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