Gogo Stock Tumbles After Q2 Earnings - What's Going On?

Gogo Inc GOGO shares are falling in premarket after reporting mixed second-quarter results and an annual revenue outlook cut. 

It declared second-quarter FY23 revenue growth of 6% year-on-year to $103.2 million, marginally missing the consensus of $103.25 million.

Service revenue grew 8% Y/Y to $79.1 million. Equipment revenue declined by 2% Y/Y to $24.2 million.

Total ATG aircraft online increased 6% Y/Y to 7,064. The average monthly service revenue per ATG aircraft online (ARPU) was $3,371, up 1% Y/Y. Total AVANCE units online increased by 24% Y/Y to 3,598.

Adjusted EBITDA grew by 7% Y/Y to $44.1 million. EPS of $0.67 beat the consensus of $0.13.

Gogo held $97.2 million in cash and equivalents and generated $15.6 million in operating cash flow.

"We are in a two-year investment cycle to take advantage of new technologies like 5G, LEO satellite and LTE to deliver order-of-magnitude improvements in network speed and coverage for our customers, grow our addressable market by 50%, and strengthen our competitive position," said Oakleigh Thorne, Chairman and CEO. 

FY23 Outlook: Gogo cut FY23 revenue to $410 million - $420 million (prior $440 million - $455 million) vs consensus $439.01 million.

Gogo revised its long-term revenue growth target of a CAGR of 15% - 17% (prior growth of 17%) from 2022 through 2027, reflecting Global Broadband contribution starting in 2025.

Price Action: GOGO shares traded lower by 6.83% at $14.33 premarket on the last check Monday.