Intelsat Continues to Reap Benefits from Gogo Acquisition in Q2
Intelsat continued to see gains from its acquisition of Gogo’s Commercial Aviation division in the second quarter of 2021. Total revenue of $507.9 million was up 5% compared to the same time period in 2020, primarily from the aviation business consolidation.
Net loss for the quarter was much less than the same time period last year. Net loss $152.3 million in Q2, compared to a net loss of $405.4 million for the same period in 2020. This was mostly due to a difference in reorganization fees for the quarter as part of its ongoing Chapter 11 bankruptcy proceedings. Intelsat incurred $49.6 million in reorganization fees for the quarter.
The Gogo acquisition made Network Services Intelsat’s largest business segment, and it now makes up 44% of Intelsat’s revenue, compared to 37% in the same time last year. This segment reported $221 million in revenue for the quarter, an increase of 25% compared to Q2 2020.
Intelsat said In-Flight Connectivity (IFC) services and expanding services with mobility and network customers had positive impacts to revenue. This increase was partially offset by non-renewals and capacity and price reductions across mobility and networks customers.
Media, formerly Intelsat’s largest segment, now stands at 36% of total revenue, compared to 42% of total revenue in the same time last year. Media revenue of $184.2 million declined 9% compared to Q2 2020.
Intelsat reported the decline in Media revenue was driven by a planned service migration by a specific customer from Intelsat’s network to the customer’s own network assets. Terminations and non-renewals in line with industry trends were also a factor slightly offset by new business expansion.
The Government segment makes up 19% of total revenue, and reported $95.8 million in revenue for the quarter, a nominal decline from Q2 2020. Intelsat said a hosted payload on Galaxy 30 entering into service and continued growth of FlexMove land mobility managed services contributed to revenue, offset by non-renewals and capacity and price reductions.
As of June 30, 2021, Intelsat’s contracted backlog was $6 billion, as compared to $5.9 billion as of March 31, 2021.
Intelsat CEO Stephen Spengler highlighted business performance for the quarter. “Network Services benefited from new mobility business from FlexMaritime managed services and the recovery in North American airline travel resulting in higher inflight connectivity revenues. Solid results in Media were driven by new business in our Europe and Asia markets and we also announced a contract expansion with a major media company that is expected to generate additional revenues in the future,” he said.