-=Gogo Inc.(GOGO) reported earnings on Thur 22 Feb 2018 (b/o)

Gogo misses by $0.04, beats on revs; guides FY18 revs in-line (under old accounting rules)

• Reports Q4 (Dec) loss of $0.52 per share, $0.04 worse than the Capital IQ Consensus of ($0.48); revenues rose 17.5% year/year to $188 mln vs the $181.44 mln Capital IQ Consensus. Service revenue increased to $164.0 million, up 18% from Q4 2016, driven by a 10% increase in commercial aircraft online to 3,231, a 12% increase in ATG business aircraft online to 4,678, and increased customer usage across all segments; EBITDA +8% to $25 mln.
• Co issues in-line guidance for FY18, sees FY18 revs of $750-790 mln vs. $768.30 mln Capital IQ Consensus Estimate. Total revenue of $865 million to $935 million (or $750 million to $790 million under ASC 605, an increase of 7% to 13% from 2017) CA-NA revenue of $445 million to $485 million, of which ~20% is equipment revenue (or $380 million to $415 million under ASC 605) CA-ROW revenue of $125 million to $165 million, of which ~50% is equipment revenue (or $75 million to $90 million under ASC 605) BA revenue of $285 million to $295 million (same as under ASC 605) Adjusted EBITDA of $75 million to $100 million (or $65 million to $90 million under ASC 605, an increase of 11% to 54% from 2017). We estimate that 2018 Adjusted EBITDA under ASC 605 would be ~$15 million higher when adjusting for the accounting impact of the airline-directed model. An increase of 550 to 650 2Ku aircraft online, of which ~300 are expected to be in CA-ROW. Total 2Ku aircraft online as of December 31, 2018 of 1,100 to 1,200. Gross capital expenditures of $150 million to $170 million and Cash CAPEX of $110 million to $130 million, of which ~35% is related to airborne Cash CAPEX. In addition, we expect airborne equipment inventory purchases related to airline-directed installations of $15 million to $30 million.
• "With 2Ku aircraft online scaling in 2018 and continued rapid growth of our Business Aviation division, we look forward to delivering another strong year of financial performance as we target achieving positive free cash flow in 2019."