Intelsat’s Gogo Commercial Aviation Acquisition Pays Off in Q1 Results
Intelsat turned in its first year-over-year double-digit revenue increase in at least eight years, thanks to contributions from its recently acquired Gogo Commercial Aviation business. The satellite operator’s first fiscal quarter 2021 revenues were $502.8 million — an increase of $43.9 million (0r 10%) from Q1 2020.
The operator also cut its total quarterly net losses from $218.8 million in Q1 2020 to $174.9 million for the three-month period that ended March 31.
Intelsat completed its $400 million cash acquisition of Gogo Commercial Aviation in December and transformed it into a business unit under its Network Services division, which delivered $214 million in Q1 revenue. This represents a 43% year-over-year increase for the division and makes Network Services Intelsat’s largest and most profitable business unit, surpassing the Media unit.
The operator said the increase would have been even greater if not for certain mobility and enterprise contract terminations that happened during the quarter. The costs attributed to the Gogo Commercial Aviation acquisition itself also offset some of the overall company’s gains.
Intelsat also reported modest gains from its Government business division, which generated a 2% year-over-year revenue increase to $97.9 million. The company said the increase was primarily due to a one-time customer premises equipment sale, the expansion of FlexGround services and the entry of its Galaxy-30 satellite into service.
The operator hit an important technical milestone during the quarter, as it successfully completed the docking of Northrop Grumman‘s Mission Extension Vehicle-2 (MEV-2) to the Intelsat 10-02 satellite and extended its life by 5 years.
The only sore spot for Intelsat was its Media division revenues, which declined 10% compared to the same period in 2020, to $185 million. Intelsat attributed the decline to the departure of a network customer, lower demand, and the lack of an occasional use services rebound.
Intelsat’s contracted backlog stands at $5.9 billion compared to $6.1 billion at the end of Q1 2020. The operator is currently in the process of a Chapter 11 bankruptcy reorganization. Costs associated with the bankruptcy during the quarter were $55.8 million in professional fees.