GoGo Abstains From 2020 Guidance as Pandemic Hits IFC Market
GoGo reported consolidated revenue of $184.5 million and a net loss of $84.8 million for the First Quarter (Q1) of 2020. The financial results released Monday showed the In-Flight Connectivity (IFC) provider predicted a strong 2020, but is now taking a serious hit due to the COVID-19 pandemic. The company did not provide 2020 guidance in the results, because of the “continued significant impact” of the pandemic on air travel.
The $184.5 million in consolidated revenue was 8% down from Q1 2019. The $84.8 million in net loss was an increase of 405% from $16.8 million in Q1 2019. GoGo attributed the net loss primarily to a $46.4 million charge related to impairment of long-lived assets and lower Adjusted EBITDA.
In terms of GoGo’s business segments, service revenue was about $151 million, down 9% from Q1 2019. Equipment revenue of $33.7 million declined 2% from Q1 2019.
“We started the year well ahead of plan, but Commercial Aviation demand fell sharply in March due to COVID-19 and has deteriorated further in Q2,” said Oakleigh Thorne, Gogo’s President and CEO. “There has also been a slowdown in new activations and an increase in account suspensions in our Business Aviation (BA) segment, which we expect will negatively impact BA revenue in Q2.”
In April, the company announced that it would furlough 54% of its workforce in May, impacting about 600 employees. In addition, GoGo is reducing employee compensation, negotiating customer and supplier contracts, and delaying aircraft equipment installation, in addition to other measures.
“The Gogo team responded quickly to COVID-19 with actions to reduce costs, maintain our strong global franchise and ensure our long-term financial viability,” Thorne said. “I think we are well positioned to get through this crisis and am extremely proud of the efforts and sacrifices of our Gogo team in these difficult times.”