Gogo has, once again, revised its revenue guidance lower for 2023. The company now expects 2023 full year revenue between $390-400 million, down from a forecast $440-455 million forecast at the beginning of the year. Even hitting the top end of this forecast, Gogo would realize a year-over-year decline in revenue; the company reported $404 million in 2022.
The drop is “driven predominantly by lower equipment revenue,” according to the company’s latest guidance. While service revenues continue to show slight increases, equipment revenue is down. CEO Oakleigh Thorne attributes that to a number of factors, but it mostly appears to be aircraft owners sitting on the sidelines as they decide whether to upgrade to the next generation of Gogo services or shift to a competing product.
On the plus side, Thorne cited a continued increase in data usage per flight hour. In Q3 2023 that metric was up 15% YoY and 77% Yo4. There absolutely is demand for data services in the sky and business jet operators are no exception. But moving from the idea of needing bandwidth on board to actually getting it there is taking longer for many owners.
Part of this is attributed to equipment and labor shortages in the aircraft maintenance world. Thorne says Gogo’s customers are seeing planes spend more time in the shop for critical repairs, delaying reactivation of their Gogo service subscriptions. Even as the company sees a shift towards more AVANCE aircraft online (now 53% of the installed fleet), revenue per aircraft is not increasing. At least not yet.
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