The call presents a constructive transformation narrative: strong execution on next‑generation products (Galileo and 5G), notable fleet and military/government wins, equipment revenue growth (+22% Y/Y) and a sizable sequential improvement in adjusted EBITDA (+41% sequential). However, the company is managing near‑term headwinds including declining legacy service revenue (service revenue -5% Y/Y), ATG aircraft online attrition (-11% Y/Y), negative free cash flow in the quarter (FCF -$19.2M), and a temporarily elevated leverage profile (3.6x) that may rise mid‑year. Management reiterated guidance and emphasized debt paydown, FCC reimbursements and anticipated H2 activation ramps, suggesting confidence in returning to stronger cash generation later in 2026. Overall, the positives around product momentum, commercial and government contract wins, and sequential margin improvement outweigh the current legacy revenue and cash flow challenges.
Company Guidance
Gogo reiterated 2026 guidance calling for total revenue of $905–945 million, adjusted EBITDA of $198–218 million (which the company said includes $3 million of strategic investments and $8 million of ongoing litigation expense), and free cash flow of $90–110 million (midpoint implying roughly 12% year‑over‑year growth); the guidance also cites $30 million slated for strategic investments (net of any FCC reimbursements), net capital expenditures of $20 million assuming $45 million in FCC reimbursement, and contemplates a slight uptick in net‑debt leverage (Q1 net‑debt leverage was 3.6x) in Q2–Q3 before returning to target by Q4 (the company also executed a $21.1 million HPS term‑loan principal repayment in April).
Galileo Shipments and Fleet Wins
Shipped 92 Galileo terminals in Q1 (82 HDX, 10 FDX), bringing cumulative Galileo shipments to 410 units across 35 STCs covering ~7,000 aircraft; 14 additional STCs underway to expand addressable market to ~8,500 aircraft. Major fleet wins include VistaJet (≈100 in scope as part of >270 planned), Wheels Up (80+ aircraft), and NetJets Europe (committed rollout to be completed in H1 2026); Galileo AOL grew 50% sequentially and management expects a strong ramp as OEM line-fit installations begin in H2.
Record ATG Equipment Sales and 5G Momentum
Sold a record 511 ATG units in the quarter (52 were 5G); total ATG equipment sold up 8% vs Q4 2025. Equipment revenue was $38.6 million, up 22% year-over-year. Pipeline for 5G is over 500 units and OEM/MRO partners (e.g., Textron, Duncan) are supporting rollout and STC activity.
C1 Conversions and AVANCE Adoption
Reported record C1 conversions of 254 in Q1 and cumulative C1 units sold of 1,063. Sold 327 C1 units in the quarter (up 10% sequentially) and 184 AVANCE units (up 5% sequentially), demonstrating customer migration from legacy EVDO to LTE/5G-ready platforms.
Military & Government Revenue Growth and Large Contracts
Military and government service revenue increased 7% sequentially (second consecutive quarter of growth) and management cited 14% year-over-year growth in the segment in commentary. Secured NOAA contract >$8 million over 5 years, a U.S. civil government deal >$3 million, UAV-related deals expected to deliver >$15 million over contract periods, and U.S. Air Force approval for Plain Simple Ku-band tail-mount on C-130 (opens access to >1,000 aircraft).
Adjusted EBITDA Sequential Improvement and Synergies
Adjusted EBITDA was $53.3 million, a 41% sequential increase driven by improved equipment profit mix, lower inventory reserves and reduced ED&D expenses. Annualized synergies have reached $40 million, exceeding prior targets.
Balance Sheet Actions and Debt Paydown
Made a $21.1 million principal payment on the HPS term loan in April (ECF sweep) and ended the quarter with $103.5 million in cash. Net leverage was 3.6x at quarter end with a plan to reduce leverage by year-end.
Guidance Reiterated with FCF Outlook
Reiterated 2026 guidance: total revenue $905–$945 million, adjusted EBITDA $198–$218 million, and free cash flow $90–$110 million (implying ~12% Y/Y FCF growth at midpoint). Guidance assumes $30 million strategic investments, $20 million net capex (assuming $45 million FCC reimbursement).
FCC Reimbursement and Transition Flexibility
Secured FCC extension to November 8, 2026 for classic product migration and allocated the full approved reimbursement amount of approximately $334 million to cover removal/replacement of covered foreign equipment, providing flexibility to transition customers from legacy EVDO to new platforms.
Operator
Good day, and thank you for standing by. Welcome to the First Quarter 2026 Gogo Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jim Golden with Collected Strategies. Jim, go ahead.
Jim Golden
Thank you, and good morning, everyone. Welcome to Gogo's First Quarter 2026 Earnings Conference Call. On the call today to discuss the company's results are Gogo's CEO, Chris Moore; and CFO, Zach Cotner. During the course of this call, Mr. Moore and Mr. Cotner may make forward-looking statements regarding future events and the future performance of the company. Participants are cautioned to consider the risk factors that could cause actual results to differ materially from those in the forward-looking statements on this call. Those risk factors are described in the earnings release filed this morning and in a more fully detailed note under Risk Factors filed in the company's annual report on 10-K and 10-Q and other documents that the company has filed with the SEC.
In addition, please note that the date of this conference call is May 7, 2026. Any forward-looking statements made today are based on assumptions as of this date, and the company undertakes no obligation to update these statements as a result of more information or future events. During this call, Mr. Moore and Mr. Cotner will present both GAAP and non-GAAP financial measures. A reconciliation and explanation of adjustments and other considerations of the company's non-GAAP measures to the most c...
