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What changed in Gogo Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Gogo Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+530 added−469 removedSource: 10-K (2025-03-14) vs 10-K (2024-02-28)

Top changes in Gogo Inc.'s 2024 10-K

530 paragraphs added · 469 removed · 319 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

68 edited+53 added−51 removed64 unchanged
Biggest changeCALEA The Communications Assistance for Law Enforcement Act, (“CALEA”), requires covered service providers to build certain law enforcement surveillance assistance capabilities into their communications networks or equipment and to maintain CALEA-related system security policies and procedures. Where applicable, we have implemented such policies and procedures and, based upon our periodic self-assessments, we believe that our network is compliant with CALEA.
Biggest changeStates also have the right to regulate wireless carriers’ billing; however, we are not currently aware of any states that impose billing requirements on ATG services. 12 CALEA The Communications Assistance for Law Enforcement Act, (“CALEA”), requires covered service providers to build certain law enforcement surveillance assistance capabilities into their communications networks or equipment and to maintain CALEA-related system security policies and procedures.
By investing in our people and taking the opportunity to promote from within when appropriate, we believe we are best able to reinforce our core values and achieve our strategic objectives. • Culture and Engagement: We conduct annual employee engagement surveys to solicit feedback and help guide planning on all people-related efforts and initiatives that not only support our team members but propel our business forward.
By investing in our people and taking the opportunity to promote from within when appropriate, we believe we are best able to reinforce our core values and achieve our strategic objectives. • Culture and Engagement: We conduct employee engagement surveys to solicit feedback and help guide planning on all people-related efforts and initiatives that not only support our team members but propel our business forward.
We offer connectivity service in the United States to business aviation aircraft and, pursuant to an ATG network sharing agreement with Intelsat, to certain commercial aircraft operated by Intelsat’s airline customers, through our own facilities, using our 8 ATG License, a nationwide commercial air-ground radiotelephone license in the 800 MHz band.
We offer connectivity service in the United States to business aviation aircraft and, pursuant to an ATG network sharing agreement with Intelsat, to certain commercial aircraft operated by Intelsat’s airline customers, through our own facilities, using our ATG License, a nationwide commercial air-ground radiotelephone license in the 800 MHz band.
In general, each initial PMA is an 7 approval of a manufacturing or modification facility’s production quality control system. PMA supplements are obtained to authorize the manufacture of a particular part in accordance with the requirements of the pertinent PMA, including its production quality control system. We routinely apply for and receive such PMAs and supplements.
In general, each initial PMA is an approval of a manufacturing or modification facility’s production quality control system. PMA supplements are obtained to authorize the manufacture of a particular part in accordance with the requirements of the pertinent PMA, including its production quality control system. We routinely apply for and receive such PMAs and supplements.
We also may obtain information about our users from third parties or create records that may be personal information in connection with our services. We use the information that we collect and create to, for example, consummate their purchase transaction, customize and personalize advertising and content for our users and enhance the entertainment options when using our service.
We also may obtain information about our users from third parties or create records that may be personal information in connection with our services. We use the information that we collect and create to, for example, consummate their purchase transaction, customize and personalize content for our users and enhance the entertainment options when using our service.
The Communications Act and FCC rules also require the FCC’s prior approval of the assignment or transfer of control of an FCC license, or the acquisition, directly or indirectly, of more than 25% of the equity or voting control of Gogo by non-U.S. individuals or entities. Our various services are regulated differently by the FCC.
The Communications Act and FCC rules also require the FCC’s prior approval of the assignment or transfer of control of an FCC license, or the acquisition, directly or indirectly, of more than 25% of the equity or voting control of Gogo by non-U.S. individuals or entities. 9 Our various services are regulated differently by the FCC.
These agreements apply to our use of the spectrum in areas adjacent to the United States’ northern and southern borders and in and out of Canadian and Mexican airspace. A bilateral ATG spectrum coordination agreement between the U.S. and Canada has been negotiated and approved and a bilateral agreement between the United States and Mexico is pending.
These agreements apply to our use of the spectrum in areas adjacent to the United States’ northern and southern borders and in and out of Canadian and Mexican airspace. 10 A bilateral ATG spectrum coordination agreement between the U.S. and Canada has been negotiated and approved and a bilateral agreement between the United States and Mexico is pending.
When a party other than the holder of the Type Certificate develops a major modification to an aircraft already type-certificated, that party must obtain an FAA-issued STC approving the design of the modified aircraft type.
When a party other than the holder of the Type Certificate develops a major modification to an aircraft 8 already type-certificated, that party must obtain an FAA-issued STC approving the design of the modified aircraft type.
The regulation of data privacy and security in other jurisdictions continues to evolve. 10 In addition, certain countries have laws that restrict the transfer of personal information outside of such countries.
The regulation of data privacy and security in other jurisdictions continues to evolve. In addition, certain countries have laws that restrict the transfer of personal information outside of such countries.
In addition to the two ATG licenses, we hold microwave licenses that are used for backhaul in our terrestrial network and an authorization for the provision of voice and data services between the United States and foreign points. ATG License Terms and Conditions The FCC issued our ATG License on October 31, 2006, for a renewable 10-year term.
In addition to the two ATG licenses, we hold microwave licenses that are used for backhaul in our terrestrial network and an authorization for the provision of voice and data services between the United States and foreign points. ATG License Terms and Conditions The FCC issued our 3 MHz ATG License on October 31, 2006, for a renewable 10-year term.
According to the Agency Rule List – Fall 2023 posted by the Office of Information and Regulatory Affairs, Office of Management and Budget, the rulemaking about accessible IFE is a long-term action.
According to the Agency Rule List – Fall 2024 posted by the Office of Information and Regulatory Affairs, Office of Management and Budget, the rulemaking about accessible IFE is a long-term action.
The efforts outlined above are supported by our dedicated human resources team and led by our Executive Vice President, Chief People Experience Officer, who is responsible for developing and executing our human capital strategy and regularly updates our Board of Directors and senior management on the operation and status of our human capital activities.
The efforts outlined above are supported by our dedicated human resources team and led by our Senior Vice President, People Experience, who is responsible for developing and executing our human capital strategy and regularly updates our Board of Directors and senior management on the operation and status of our human capital activities.
We must comply with certain Communications Act and FCC privacy and data security rules for our services, including certain provisions applicable to customer proprietary network information (“CPNI”). In December 2023, the FCC adopted additional CPNI and cybersecurity rules requiring disclosures of applicable data breaches to the FCC, federal law enforcement, and customers, which may affect our business.
We must comply with certain Communications Act and FCC privacy and data security rules for our services, including certain provisions applicable to customer proprietary network information (“CPNI”). Effective March 2024, the FCC adopted additional CPNI and cybersecurity rules requiring disclosures of applicable data breaches to the FCC, federal law enforcement, and customers, which may affect our business.
Our distribution partners include every OEM of business aviation aircraft and a global aftermarket network of approximately 110 dealers with approximately 200 locations, many of whom we have worked with for decades.
Our distribution partners include every OEM of business aviation aircraft and a global aftermarket network of approximately 140 dealers with approximately 220 locations, many of whom we have worked with for decades.
We believe that demand for in-flight connectivity will continue to increase because of changes in the demographics of our customer base, the proliferation of social applications and lifestyle changes that remain in a post-COVID world such as remote work and use of videoconferencing.
Further, we believe that demand for in-flight connectivity will continue to increase because of changes in the demographics of our customer base, the proliferation of social applications and lifestyle changes that remain in a post-COVID world, such as videoconferencing and live streaming.
Competitive Differentiators We believe Gogo is uniquely positioned to thrive in this dynamic industry environment, due in part to the competitive differentiators described below: Our Product Platform . Our product platform includes three components – networks, antennas, and airborne equipment and software, each of which is discussed in greater detail below.
Competitive Differentiators We believe Gogo is uniquely positioned to thrive in this dynamic industry environment, due in part to the competitive differentiators described below: Our Product Platform . Our product platform includes three components: networks, antennas, and airborne equipment and software.
The service will use an electronically steered antenna (“ESA”), specifically designed with Hughes Network Systems, LLC (“Hughes”) to address a broad range of business aviation aircraft, operating on a LEO satellite network operated by Network Access Associates, Ltd. (“Eutelsat OneWeb”).
Gogo Galileo will use an electronically steered antenna (“ESA”), specifically designed with Hughes Network Systems, LLC (“Hughes”) to address a broad range of business aviation and military/government aircraft, operating on a LEO satellite network operated by Network Access Associates, Ltd. (“Eutelsat OneWeb”).
We believe that Gogo Galileo, in combination with or as an alternative to our ATG systems, will allow us to increase our penetration of the North American heavy jet market and provide an upgrade path for our existing ATG customer base.
We believe that Gogo Galileo, in combination with or as an alternative to our ATG and GEO services, will allow us to increase our penetration of the North American market and provide an upgrade path and an additional product for our existing ATG and GEO customer base.
Equipment Certification We may not operate, lease, sell, market or distribute any radio transmission equipment used in the provision of our services unless such equipment is compliant with the FCC’s equipment authorization and relevant technical rules.
Equipment Certification We may not operate, lease, sell, market or distribute any radio transmission equipment used in the provision of our services unless such equipment is compliant with the FCC’s equipment authorization and relevant technical rules. We have the required FCC equipment authorizations for our services in the United States.
For example, the California Consumer Privacy Act (“CCPA”) took effect January 1, 2020, and provides broad privacy rights for California consumers, including, among others, the right to obtain copies of their personal information collected in the past 12 months, the ability to opt out from the sale of personal information and the right to demand the deletion of personal information.
For example, the California Consumer Privacy Act (“CCPA”), as amended by the California Privacy Rights Act (“CPRA”), provides broad privacy rights for California consumers, including, among others, the right to obtain copies of their personal information collected in the past 12 months, the ability to opt out from the sale of personal information and the right to demand the deletion of personal information.
As of December 31, 2023, our market was comprised of approximately 25,000 business aircraft in North America, of which approximately 34% have broadband connectivity, and approximately 14,500 business aircraft in the rest of the world, of which approximately 6% have broadband connectivity. As of December 31, 2023, we had approximately 4,200 customers.
As of December 31, 2024, our market was comprised of approximately 27,000 business aircraft in North America, of which approximately 34% have broadband connectivity, and approximately 14,000 business aircraft in the rest of the world, of which approximately 14% have broadband connectivity. As of December 31, 2024, we had approximately 8,200 customers.
Program participants are subject to a number of conditions and requirements under the FCC’s rules. The Company complied with the requirement to submit a reimbursement request prior to July 15, 2023 and received its first disbursement of funds on July 21, 2023, starting a one-year deadline to complete the removal, replacement and disposal of covered equipment, by July 21, 2024.
The Company complied with the requirement to submit a reimbursement request prior to July 15, 2023 and received its first disbursement of funds on July 21, 2023, starting a one-year deadline to complete the removal, replacement and disposal of covered equipment, by July 21, 2024.
We also have a number of patent applications pending both in and outside of the United States and we will continue to seek patent protection in the United States and certain other countries to the extent we believe such protection is appropriate and cost-effective. 11 We consider our brands to be important to the success of our business and our competitive position.
We also have a number of patent applications pending both in and outside of the United States, and we will continue to seek patent protection in the United States and certain other countries to the extent we believe such protection is appropriate and cost-effective.
For example, we provide some of our voice and data services (not including Gogo Biz or AVANCE) by reselling the services of two satellite operators.
For example, we provide some of our voice and data services (not including ATG) by reselling the services of satellite operators.
Our registered trademarks in the United States and certain other countries include, among others, “Gogo,” “Gogo 5G,” “Gogo Galileo,” “Gogo Biz” and “Gogo Vision,” although we have not yet obtained registrations for our most important marks in all markets in which we currently do business or intend to do business in the future.
Our registered trademarks in the United States and certain other countries include, among others, “Gogo,” “Gogo 5G,” “Gogo Galileo,” “Gogo Biz” and “Gogo Vision,” along with trademarks acquired through the Transaction including, among others, “Satcom Direct,” “SD Pro,” “FlightDeck Freedom” and “Plane Simple,” although we have not yet obtained registrations for our most important marks in all markets in which we currently do business or intend to do business in the future.
We also invest in various professional development and leadership training initiatives and conduct periodic forums relevant to our business that provide unique learning and networking opportunities across all business functions. • Recognition: Our employees’ success is celebrated.
New hires participate in an onboarding and orientation program, which is intended to build knowledge and understanding of our business. We also invest in various professional development and leadership training initiatives and conduct periodic forums relevant to our business that provide unique learning and networking opportunities across all business functions. • Recognition: Our employees’ success is celebrated.
The comprehensiveness and flexibility in our product platform allows us to align our value proposition with our customers’ priorities and identify solutions based on geography, mission, size of aircraft and passenger preference. Our Distribution Relationships . We believe that our distribution network is unmatched in our industry.
The comprehensiveness and flexibility in our product platform allow us to align our value proposition with our customers’ priorities and identify solutions based on geography, mission, size of aircraft and passenger preference.
Our customers have a broad range of equipment choices for their in-flight systems, which allows us to provide a solution based on geography, mission, size of aircraft and passenger preference. Key components of our in-flight systems include: Antennas .
In-Flight Systems . Across both of our business aviation and military/government customer bases, our customers have a broad range of equipment choices for their in-flight systems, which allows us to provide a solution based on geography, mission, size of aircraft and passenger preference.
Under the terms of the sale of our commercial aviation (“CA”) business to Intelsat, we retained ownership of the entire patent portfolio held by Gogo Inc. and its affiliates, including patents developed and obtained in connection with our former CA business.
Such agreements, as well as certain licenses to commercially available software, are material to our business. 13 Under the terms of the sale of our commercial aviation (“CA”) business to Intelsat that closed in 2020, we retained ownership of the entire patent portfolio held by Gogo Inc. and its affiliates, including patents developed and obtained in connection with our former CA business.
Licenses and Regulation Federal Aviation Administration The FAA prescribes standards and certification requirements for the manufacturing of aircraft and aircraft components, and certifies repair stations to perform aircraft maintenance, preventive maintenance and alterations, including the installation and maintenance of aircraft components.
Further, we are subject to the laws and regulations of the jurisdictions where we sell equipment. Federal Aviation Administration The FAA prescribes standards and certification requirements for the manufacturing of aircraft and aircraft components, and certifies repair stations to perform aircraft maintenance, preventive maintenance and alterations, including the installation and maintenance of aircraft components.
Gogo started in analogue air-to-ground (“ATG”) technology in the late 1990s, then, as analogue cellular backhaul disappeared, migrated to narrowband satellite connectivity in the early 2000s, then back to ATG with our digital broadband 3G and 4G networks beginning in 2010. We expect to commercially launch our fourth ATG network – Gogo 5G – in the fourth quarter of 2024.
Gogo started in analogue ATG technology in the late 1990s, then, as analogue cellular backhaul disappeared, migrated to narrowband satellite connectivity in the early 2000s, and then back to ATG with our digital broadband networks beginning in 2010.
See “ATG License Terms and Conditions.” The FCC’s current rules classify broadband Internet access service as a lightly regulated, non-common carrier “information service,” and remove virtually all of the previously imposed network neutrality restrictions on blocking access to lawful content, applications, services or non-harmful devices; impairing or degrading lawful Internet traffic on the basis of content, applications, services or non-harmful devices; favoring some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind; or prioritizing the content and services of broadband providers’ affiliates.
In May 2024, the FCC classified broadband Internet access service as a common carrier “telecommunications service” and imposed network neutrality restrictions on blocking access to lawful content, applications, services or non-harmful devices; impairing or degrading lawful Internet traffic on the basis of content, applications, services or non-harmful devices; favoring some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind; or prioritizing the content and services of broadband providers’ affiliates.
Our Innovative Culture . We continuously innovate and have a strong track record of innovation in our networks. As of February 23, 2024, we held approximately 512 U.S. and international patents, most of which relate to network technology.
We continuously innovate and have a strong track record of innovation in our equipment and service offerings. As of March 1, 2025, we held approximately 571 U.S. and international patents, most of which relate to network technology.
The business aviation in-flight connectivity market is evolving again due to advancements in technology and several change catalysts. The most significant advancement in technology driving change in our industry today is the introduction of low earth orbit (“LEO”) satellite technology, which provides, among other things, a global service offering and significantly higher capacity and lower latency than alternatives available today.
The most significant advancement in technology driving change in our industry today is the introduction of LEO satellite technology, which provides, among other things, a global service offering, higher capacity and lower latency than available alternatives.
Due to a number of factors, including supply chain disruptions, the current insufficiency of FCC funding and the operational and logistical complexity of replacing airborne equipment, the Company does not expect to complete the project by the July 21, 2024 deadline, and intends to seek multiple extensions.
Due to a number of factors, including supply chain disruptions, the insufficiency of FCC funding prior to the passage of the FY 2025 NDAA, and the operational and logistical complexity of replacing airborne equipment, the Company was unable to complete the project by the July 21, 2024 deadline, and has sought and been granted two extensions.
Our principal executive offices are located at 105 Edgeview Dr., Suite 300, Broomfield, CO 80021. Our telephone number is (303) 301-3271. Our website addresses are www.gogoair.com and www.business.gogoair.com. Available Information Our websites are located at www.gogoair.com and www.business.gogoair.com, and our investor relations website is located at http://ir.gogoair.com.
Our telephone number is (303) 301-3271. Our website addresses are www.gogoair.com and www.satcomdirect.com. Available Information Our investor relations website is located at http://ir.gogoair.com.
On May 25, 2018, the General Data Protection Regulation (“GDPR”) of the European Union (“EU”) took effect, and it has imposed more restrictive privacy-related requirements for entities outside the EU that process personal information about European data subjects.
To the extent we collect personal information of residents of other countries, we may be subject to the data protection regulations of the relevant countries. The General Data Protection Regulation (“GDPR”) of the European Union (“EU”) has imposed more restrictive privacy-related requirements for entities outside the EU that process personal information about European data subjects.
As of December 31, 2023, the Company has filed a total of $1.7 million in claims and received $1.7 million in reimbursements. Intellectual Property We rely on a combination of intellectual property rights, including trade secrets, patents, copyrights, trademarks and domain names, as well as contractual restrictions to protect intellectual property and proprietary technology owned or used by us.
Intellectual Property We rely on a combination of intellectual property rights, including trade secrets, patents, copyrights, trademarks and domain names, as well as contractual restrictions to protect intellectual property and proprietary technology owned or used by us. We have patented certain of our technologies in the United States and certain countries outside of the United States.
Given our highly specialized technology and required production levels, we design, assemble and test our airborne line replaceable units (“LRUs”) in-house, while relying on third parties to manufacture specific components based on our design specifications to maximize production efficiencies. We retain the intellectual property associated with the airborne LRUs.
Given our highly specialized technology and required production levels, we design, assemble and test our airborne LRUs, SDRs and Plane Simple® terminals in-house, while relying on third parties to manufacture specific components based on our design specifications. We also rely on third parties to manufacture our antennas and generally share antenna design responsibilities and intellectual property with these vendors.
We view all these significant changes as opportunities to leverage our technological know-how and deep understanding of the business aviation in-flight connectivity market to drive greater penetration of our solutions in our markets over the next five to ten years.
We view all these significant changes as opportunities to leverage our combined Company’s technological know-how and deep understanding of the in-flight connectivity market and to drive greater penetration of our solutions in our markets over the next decade. • Gogo Galileo : We commercially launched the first global LEO broadband satellite service purpose-built for business aviation (“Gogo Galileo”) in the first quarter of 2025.
Investors and others can receive notifications of new information posted on our investor relations website in real-time by signing up for email alerts and RSS feeds.
Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, and blogs as part of our investor relations website. Investors and others can receive notifications of new information posted on our investor relations website in real-time by signing up for email alerts and RSS feeds.
In addition, we believe that Gogo Galileo will allow us to penetrate the business aviation market outside of North America, where approximately 6% of business aviation aircraft are installed with in-flight connectivity systems.
In addition, we believe that Gogo Galileo will allow us to penetrate the business aviation and military/government market outside of North America, where there has been a lower adoption rate of in-flight connectivity.
Customers and Distribution Partners . We provide in-flight connectivity services to a variety of customers needing connectivity, but our end users are primarily aircraft owners/operators.
Our manufacturing and repair facilities located in the U.S. and in Canada are respectively certified by the Federal Aviation Administration (“FAA”)- and Transport Canada Civil Aviation. Our Customers and Distribution Partners Business Aviation Customers We provide in-flight connectivity services to a variety of customers needing connectivity, but our end-users are primarily aircraft owners/operators.
Our agreements for modems, base stations and antennas do not renew automatically and thus require periodic renegotiation. Such agreements, as well as certain licenses to commercially available software, are material to our business.
Our agreements for modems, base stations and antennas do not renew automatically and thus require periodic renegotiation.
To the extent the FCC further restricts reasonable network management, adopts its proposed network neutrality rules, or determines that any of our services qualify as broadband Internet access service, our business may be affected.
To the extent future legislation by Congress or state legislatures, further litigation in federal or state courts, or new regulations by the FCC further restrict reasonable network management, impose network neutrality rules, or determine that any of our services qualify as broadband Internet access service, our business may be affected.
All certifications required for equipment currently used in the provision of our services have been obtained. 9 Privacy and Data Security-Related Regulations We collect personal information, such as name, address, e-mail address and credit card information, directly from our users when they register to use our services, along with certain identifiers associated with devices using our services.
To maintain compliance and mitigate risks related to international sales and exports, we routinely assess our obligations under these regulations. Privacy and Data Security-Related Regulations We collect personal information, such as name, address, e-mail address and credit card information, directly from our users when they register to use our services, along with certain identifiers associated with devices using our services.
Further corporate governance information, including our certificate of incorporation, bylaws, corporate governance guidelines, board committee charters, and code of business conduct, is also available on our investor relations website under the heading “Corporate Governance.” The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 13
The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 15
Due to a shortfall in the amount appropriated by Congress to fund the FCC Reimbursement Program, approximately $132 million of the approved amount is currently allocated to the Company under the program. If Congress appropriates additional funds for this purpose, the allocations of the Company and other approved applicants will be increased pro rata .
Due to an initial shortfall in the amount appropriated by Congress to fund the FCC Reimbursement Program, approximately $132 million of the approved amount is currently allocated to the Company under the program.
Thus, these rules apply to our satellite-based services. This disclosure must include brief, clear and non-misleading plain language descriptions of the services provided. States also have the right to regulate wireless carriers’ billing; however, we are not currently aware of any states that impose billing requirements on ATG services.
Thus, these rules apply to our satellite-based services. This disclosure must include brief, clear and non-misleading plain language descriptions of the services provided.
The AVANCE platform is software-centric and designed to be extensible as it includes hardware built with common components that operate on a single operating system across multiple devices. Approximately 80% of the components included in AVANCE L5™ and AVANCE L3™ (a compact version of AVANCE L5 designed for smaller aircraft) are common across the two systems.
For example, the AVANCE or SDR 7 platforms are software-centric and designed to be fungible as it includes hardware built with common components that operate on a single operating system across multiple devices. Our Distribution Relationships . We believe that our distribution network is unmatched in our industry.
Competition We compete against both equipment-providers and GEO- and LEO-satellite based telecommunications service providers, as well as resellers of the above, to the business aviation market, including Honeywell Aerospace, Collins Aerospace, Satcom Direct, ViaSat, SmartSky Networks and Starlink. A number of our competitors are focused on servicing the heavy jet market through GEO satellite services.
Competition With respect to the provisioning of our services to the business aviation and military and government markets, we compete against both equipment-providers and GEO- and LEO-satellite based telecommunications service providers, as well as resellers of the above, including but not limited to Honeywell Aerospace, Collins Aerospace, Intelsat, SES, SpaceX, and ViaSat.
Simultaneous with the development of Gogo 5G, we are actively working with a subset of AVANCE customers and customers utilizing our legacy Gogo Biz ATG airborne system operating on our ground 3G and 4G networks to transition to an AVANCE system compatible with a new LTE network.
We are also actively working with a subset of our customers utilizing our AVANCE products and legacy Gogo Biz ATG airborne system to transition to an AVANCE system compatible with a new LTE network. We anticipate this subset of customers will see improved performance because of this network transition, which is expected to occur in 2026.
We offer a variety of connectivity services tailored to our various networks and technologies that are generally priced on a per-aircraft per-month basis. We offer service plans ranging from unlimited data usage to an hourly monthly consumption plan and offer alongside these data plans voice rates, inflight entertainment options such as Gogo Vision, and other service features.
We offer service plans ranging from unlimited data usage to an hourly monthly consumption plan, and offer alongside these data plans voice rates, inflight entertainment options, and other service features. Infrastructure . The infrastructure supporting our in-flight connectivity services consists of our networks, towers, cybersecurity software, and data centers. Customer Support .
Our top ten customers accounted for approximately 21% of our 2023 service revenue (excluding service revenue earned under a network sharing agreement with Intelsat Jackson Holdings S.A. (“Intelsat”)), and no customer accounted for more than 10% of our revenue in 2023.
Our top ten customers accounted for approximately 20% of our 2024 service revenue (excluding service revenue earned under a network sharing agreement with Intelsat, and no customer accounted for more than 10% of our revenue in 2024. We also sell directly to every OEM of business aviation aircraft including Bombardier, Dassault Falcon, Embraer, Gulfstream, Pilatus and Textron Aviation.
We do not believe that our business is dependent to any material extent on any single patent or group of patents that we own.
As of March 1, 2025, we held 167 U.S. patents expiring on dates ranging from June 2025 to March 2043 and 404 foreign patents expiring on dates ranging from September 2027 to October 2040. We do not believe that our business is dependent to any material extent on any single patent or group of patents that we own.
We rely on both trademark registrations and common law protection for trademarks.
We consider our brands to be important to the success of our business and our competitive position. We rely on both trademark registrations and common law protection for trademarks.
In addition to carefully calibrated salaries and bonuses, which are reviewed annually, our employees benefit from a generous benefit package, including employee stock purchase and 401(k) programs. Additionally, in 2023 and 2022, all of our employees were eligible for equity awards through our annual equity program as part of their compensation.
In addition to carefully calibrated salaries and bonuses, which are reviewed annually, our employees benefit from a generous benefit package, including an employee stock purchase and 401(k) program. We also grant additional equity awards on an annual basis to certain employees identified as high performers. • Training & Development: The continued development of our people is critical to our success.
Products, Services, Customers and Customer Support We focus exclusively on selling in-flight connectivity to the business aviation market and implement our value proposition of offering the best products and services through a comprehensive portfolio consisting of our in-flight systems, in-flight services, aviation partner support, engineering, design and development services and production operations functions. In-Flight Systems .
Our Products, Services and Customer Support We accomplish our mission as the world’s only multi-orbit, multi-band in-flight connectivity provider, by delivering secure and reliable in-flight connectivity solutions for business and military/government aviation, and by offering a comprehensive portfolio of products and services consisting of our in-flight systems, in-flight services, aviation partner support, engineering, design and development services, and production operations functions.
We webcast our earnings calls and certain events we participate in or host with members of the investment community on our investor relations website. Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, and blogs as part of our investor relations website.
We may use our website as a distribution channel of material company information, and so investors should monitor it. We webcast our earnings calls and certain events we participate in or host with members of the investment community on our investor relations website.
We anticipate this subset of customers will see improved performance because of this network transition, which is expected to occur in early 2026. The cost for the transition to the new LTE network is partially offset given our participation in the FCC Secure and Trusted Communications Networks Reimbursement Program (the “FCC Reimbursement Program”).
The cost for the transition to the new LTE network is offset by our participation in the FCC Secure and Trusted Communications Networks Reimbursement Program (the “FCC Reimbursement Program”). • GEO Broadband Service : As a result of the Transaction, we now partner with industry satellite network operators to deliver GEO Ku- and Ka-band services.
We also sell directly to every OEM of business aviation aircraft including Bombardier, Dassault Falcon, Embraer, Gulfstream, Pilatus and Textron Aviation. In the aftermarket, we sell through a global distribution network of approximately 110 independent dealers with approximately 200 locations who are certified by the Federal Aviation Administration (“FAA”) as Maintenance and Repair Organizations.
In the aftermarket, we sell through a global distribution network of approximately 140 independent dealers with approximately 220 locations who are certified by the FAA as Maintenance and Repair Organizations. Our independent dealers market, resell and obtain FAA-required supplemental type certificates (“STC”) for our equipment.
Our employees have the opportunity to learn more about our business strategy and ask questions of our leadership team during Town Hall meetings we host quarterly. 12 • Diversity, Equity & Inclusion (DEI): Gogo seeks to create an environment where each individual’s uniqueness is respected and which allows for a sense of inclusion and belonging.
Our employees have the opportunity to learn more about our business strategy and ask questions of our leadership team during Town Hall meetings we host quarterly. In addition, we engage with our employees through wellness programs, community events, and hosted events at our offices.
The CPRA went into effect on January 1, 2023, and new regulations are expected to take effect over the course of 2024.
New regulations under the CPRA are expected to take effect over the course of 2025. Approximately a dozen state privacy laws have come into effect since 2020, and more are scheduled to come into effect over the course of 2025.
We may in the future face competition from other operators of LEO or other non-GEO satellite networks. We believe that the principal points of competition in our market are technological capabilities, price, geographic coverage, customer service, product development, conformity to customer specifications, regulatory compliance, quality of support after the sale and timeliness of delivery and installation.
We differentiate ourselves in this highly competitive market through the following factors: technological capabilities, redundancy and reliability resulting from our multi-orbit and multi-band solutions, experienced network integration management, price, geographic coverage, customer service, ancillary service offerings for safety and cybersecurity services, product development, conformity to customer specifications, regulatory compliance, quality of support after the sale, and timeliness of delivery and installation.
We have also established employee resource groups led by employees with diverse backgrounds, experiences or characteristics who share a common interest in professional development and improving corporate culture. Other key initiatives include building awareness of unconscious bias and investing in and seeking to expand our engagement with diverse students at targeted colleges and universities.
To aid in this effort, our initiatives include building awareness of unconscious bias and investing in and seeking to expand our engagement with students at colleges and universities.
We obtained and paid for this spectrum through an auction conducted by the FCC.
We obtained and paid for this spectrum through an auction conducted by the FCC. See “—ATG License Terms and Conditions.” In 2023, the FCC adopted regulations, including broadband labeling and digital discrimination rules, that apply to broadband Internet access service.
As of December 31, 2023, we had 457 employees. No employee is a member of a labor union. Corporate Information Gogo Inc. is a holding company that does business through its subsidiaries. Our principal operating subsidiary is Gogo Business Aviation LLC, which is a direct, wholly owned subsidiary of Gogo Intermediate Holdings LLC.
As of December 31, 2024, we employed approximately 790 individuals worldwide, with 81% of our workforce located in the United States, and no employee was covered by a collective bargaining agreement with a union. Corporate Information Gogo Inc. is a holding company that does business through its subsidiaries.
We also continue to provide narrowband satellite services to customers in North America and internationally through distribution agreements with satellite providers. As of December 31, 2023, we had approximately 7,200 ATG business aircraft online, of which approximately 4,000 were equipped with our AVANCE platform and approximately 3,200 with Gogo Biz, our legacy ATG broadband system.
As of December 31, 2024, we had approximately 1,249 activated GEO broadband business aviation customer aircraft and 7,059 line-replaceable units (“LRUs”) for our ATG broadband services, of which approximately 4,608 were equipped with AVANCE.
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Item 1. Business Company Overview and Strategy Our Mission and our Industry’s Evolution Gogo is the world’s largest provider of broadband connectivity services for the business aviation market. We have served this market for more than 25 years.
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Business Company Overview Acquisition of Satcom Direct, LLC (the “Transaction”) On December 3, 2024 (the “Closing”), we purchased all of the issued and outstanding equity interests of Satcom Direct, LLC, a Delaware limited liability company (f/k/a Satcom Direct, Inc., a Florida corporation) and certain of its affiliates and subsidiaries (collectively, “Satcom Direct”), in exchange for (i) an aggregate cash purchase price of approximately $375,000,000, subject to customary post-closing adjustments, (ii) 5,000,000 restricted shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) (valued at approximately $40,500,000 based on the Company’s closing stock price of $8.10 on December 2, 2024), and (iii) up to an additional $225,000,000 in potential earnout payments of cash and/or Common Stock tied to realizing certain financial performance milestones over four years following the Closing.
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Our mission is to enrich the lives of passengers and the efficiency of operators with the world’s best business aviation in-flight connectivity and customer support. We have always sought to provide the best connectivity for the business aviation market regardless of technology, and we have a successful history of doing so.
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The acquisition has created the only in-flight connectivity provider able to satisfy the performance and cost needs of every segment of the global business aviation and military/government mobility markets. Founded in 1997, Satcom Direct primarily engages in providing business, military and government in-flight connectivity services as a reseller of satellite services.
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Until recently, we focused primarily on business aviation aircraft in North America, which comprise approximately 63% of the worldwide business aviation fleet, and we are the leading provider of in-flight connectivity in that market.
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Satcom Direct operates worldwide with an international sales and service team based in nine countries. Satcom Direct sells services and equipment globally through their international sales force to OEMs, governments, military groups and private fleet companies, among other entities.
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Further, 69% of business aircraft in North America were manufactured before in-flight connectivity was available as a linefit option. We expect approximately 21% of these aircraft will be replaced in the next five to seven years, with new aircraft coming pre-installed with in-flight connectivity given customer expectations today.
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Satcom Direct manages a network operating center and maintains its own data center in Melbourne, Florida with licensed data sites strategically placed around the world.
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As outlined below, we have refined our strategy to capture these opportunities, including an announcement in May 2022 that we are preparing to launch the first global broadband service designed for business aviation (“Gogo Galileo”). We expect to commercially launch Gogo Galileo in the fourth quarter of 2024.
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In connection with the Closing, the Company and Gogo Intermediate Holdings LLC (“GIH”), a direct wholly owned subsidiary of Gogo Inc., entered into a credit agreement with HPS Investment Partners, LLC, as the administrative agent, and the lenders party thereto, which provides for a term loan credit facility (the “HPS Term Loan Facility”) in an aggregate principal amount of $250 million.
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Now and Next Strategy Given the industry evolution described above, we have refined our strategy, ultimately creating what we refer to as the “Now and Next Strategy.” The Now and Next Strategy positions Gogo to penetrate the business aviation market outside of North America while maintaining and strengthening our leadership position in North America.
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The HPS Term Loan Facility amortizes in quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity of the HPS Term Loan Facility on April 30, 2028.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changePandemics or other outbreaks of contagious diseases and the measures implemented to combat them have had, and may continue to have, a material adverse effect on our business. We face various risks related to public health issues, including epidemics, pandemics and other outbreak of infectious disease.
Biggest changeSee “— The changes in executive management that occurred as part of the acquisition of Satcom Direct could disrupt our operations and may have a material adverse effect on our business. ” 21 Pandemics or other outbreaks of contagious diseases and the measures implemented to combat them have had, and may continue to have, a material adverse effect on our business.
We cannot predict whether and to what extent the FCC or the administrator on which it relies to administer the Reimbursement Program will approve our requests for the specific reimbursement of costs, or the time frames for any reimbursement.
We cannot predict whether and to what extent the FCC or the administrator on which it relies to administer the FCC Reimbursement Program will approve our requests for the specific reimbursement of costs, or the time frames for any reimbursement.
The amount of our indebtedness or such other obligations could have important consequences for holders of our common stock, including, but not limited to: • a meaningful portion of our cash flows from operations is expected to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing the funds available to us for other purposes; • our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or general corporate purposes may be limited, and our ability to satisfy our obligations with respect to our indebtedness may be impaired in the future; • we may be at a competitive disadvantage compared to our competitors with less indebtedness or with comparable indebtedness at more favorable interest rates and which, as a result, may be better positioned to withstand economic downturns; • our ability to refinance indebtedness may be limited or the associated costs may increase; • our ability to engage in acquisitions without raising additional equity or obtaining additional debt financing may be impaired in the future; • it may be difficult for us to satisfy our obligations to our creditors, resulting in possible defaults on and acceleration of such indebtedness; • we may be more vulnerable to general adverse economic and industry conditions; and • our flexibility to adjust to changing market conditions and our ability to withstand competitive pressures could be limited, or we may be prevented from making capital investments that are necessary or important to our operations in general, our growth strategy and our efforts to improve operating margins of our business units.
The amount of our indebtedness or such other obligations could have important consequences for holders of our common stock, including, but not limited to: • a meaningful portion of our cash flows from operations is expected to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing the funds available to us for other purposes; • our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or general corporate purposes may be limited, and our ability to satisfy our obligations with respect to our indebtedness may be impaired in the future; • we may be at a competitive disadvantage compared to our competitors with less indebtedness or with comparable indebtedness at more favorable interest rates and which, as a result, may be better positioned to withstand economic downturns; • our ability to refinance indebtedness may be limited or the associated costs may increase; • our ability to engage in acquisitions without raising additional equity or obtaining additional debt financing may be impaired in the future; • it may be difficult for us to satisfy our obligations to our creditors, resulting in possible defaults on and acceleration of such indebtedness; • we may be more vulnerable to general adverse economic and industry conditions; and 34 • our flexibility to adjust to changing market conditions and our ability to withstand competitive pressures could be limited, or we may be prevented from making capital investments that are necessary or important to our operations in general, our growth strategy and our efforts to improve operating margins of our business units.
Factors heightening the risk of future delays in our 5G network or other next generation technologies, or a failure of such technologies to perform once commercialized, include: (i) our failure to design and develop a technology that provides the features and performance we require; (ii) integrating the solution with our existing ATG network; (iii) the availability of adequate spectrum; (iv) the failure of spectrum to perform as expected; (v) the failure of equipment and software to perform as expected; (vi) problems arising in the manufacturing process; (vii) our ability to negotiate contracts with suppliers on acceptable commercial and other terms; (viii) our reliance on single-source suppliers and their ability to continue as a going concern with adequate access to capital for the development and manufacturing of the core elements of the network and on other suppliers to provide certain components and services; and (ix) delays in obtaining or failures to obtain the required regulatory approvals for installation and operation of such equipment and the provision of service to passengers.
Factors heightening the risk of future delays in our 5G network or other next generation technologies, or a failure of such technologies to perform once commercialized, include: (i) our failure to design and develop a technology that provides the features and performance we require; (ii) integrating the solution with our existing network services; (iii) the availability of adequate spectrum; (iv) the failure of spectrum to perform as expected; (v) the failure of equipment and software to perform as expected; (vi) problems arising in the manufacturing process; (vii) our ability to negotiate contracts with suppliers on acceptable commercial and other terms; (viii) our reliance on single-source suppliers and their ability to continue as a going concern with adequate access to capital for the development and manufacturing of the core elements of the network and on other suppliers to provide certain components and services; and (ix) delays in obtaining or failures to obtain the required regulatory approvals for installation and operation of such equipment and the provision of service to passengers.
We have implemented policies and procedures intended to ensure that we timely anticipate technology and product transitions and have access to sufficient inventory and services, but if such policies prove ineffective and we are unable to continue to engage suppliers with the capabilities or capacities required by our business to effect a transition, or if such suppliers fail to deliver quality products, parts, equipment and services in sufficient quantities or on a timely basis 22 consistent with our schedule, our business, financial condition and results of operations may be materially adversely affected.
We have implemented policies and procedures intended to ensure that we timely anticipate technology and product transitions and have access to sufficient inventory and services, but if such policies prove ineffective and we are unable to continue to engage suppliers with the capabilities or capacities required by our business to effect a transition, or if such suppliers fail to deliver quality products, parts, equipment and services in sufficient quantities or on a timely basis consistent with our schedule, our business, financial condition and results of operations may be materially adversely affected.
If we are required for any reason (including expiration of the contract, termination by one party for material breach or other termination events) to find one or more alternative suppliers, we estimate that the replacement process could take up to two years depending upon the component or service, and we may not be able to contract with such alternative suppliers on a timely basis, on commercially 15 reasonable terms, or at all.
If we are required for any reason (including expiration of the contract, termination by one party for material breach or other termination events) to find one or more alternative suppliers, we estimate that the replacement process could take up to two years depending upon the component or service, and we may not be able to contract with such alternative suppliers on a timely basis, on commercially reasonable terms, or at all.
In addition, such incidents may disrupt our operations and the services we provide to customers, result in the loss of value of trade secrets, require expensive efforts to investigate, remediate or resolve, damage our reputation, and cause a loss of revenue, reputational harm or a loss of confidence in our products and services, all of which may have a material adverse effect on our business prospects, financial condition and results of operations.
In addition, such cybersecurity incidents may disrupt our operations and the services we provide to customers, result in the loss of value of trade secrets, require expensive efforts to investigate, remediate or resolve, damage our reputation, and cause a loss of revenue, reputational harm or a loss of confidence in our products and services, all of which may have a material adverse effect on our business prospects, financial condition and results of operations.
Fines issued for non-compliance with such requirements may be substantial, including fines issued under the GDPR which can be as high as 4% of global revenue, and an adverse finding by a regulator or court may result in costly and onerous requirements being placed on the Company, a prohibition on engaging in certain aspects of our business or damage to our reputation.
Fines issued for 30 non-compliance with such requirements may be substantial, including fines issued under the GDPR which can be as high as 4% of global revenue, and an adverse finding by a regulator or court may result in costly and onerous requirements being placed on the Company, a prohibition on engaging in certain aspects of our business or damage to our reputation.
In light of the Ukraine war and other geopolitical events and dynamics, including ongoing tensions with North Korea, Iran and other states, state-sponsored parties or their supporters may launch retaliatory cyberattacks, and may attempt to cause supply chain disruptions, or carry out other geopolitically motivated retaliatory actions that may adversely disrupt or degrade our operations and may result in data compromise.
In light of the Ukraine war and other geopolitical events and dynamics, including ongoing tensions with North Korea, Iran and other states, state-sponsored parties or their supporters may launch cyberattacks, and may attempt to cause supply chain disruptions, or carry out other geopolitically motivated actions that may adversely disrupt or degrade our operations and may result in data compromise.
Further, our in-cabin network operates as an open, unsecured Wi-Fi hotspot, and non-encrypted transmissions users send over this network may be vulnerable to access by other users on the same plane. We depend on the security of the network infrastructure and products of our third-party providers of telecommunications, cloud computing, customer support and other vendors.
Further, our in-cabin and cockpit network operates as an open, unsecured Wi-Fi hotspot, and non-encrypted transmissions users send over this network may be vulnerable to access by other users on the same plane. We depend on the security of the network infrastructure and products of our third-party providers of telecommunications, cloud computing, customer support and other vendors.
These corporate governance guidelines and code of business ethics do not, by themselves, prohibit transactions with the Thorne Entities. 31 Fulfilling our obligations associated with being a public company is expensive and time-consuming, and any delays or difficulties in satisfying these obligations may have a material adverse effect on our results of operations and our stock price.
These corporate governance guidelines and code of business ethics do not, by themselves, prohibit transactions with the Thorne Entities. Fulfilling our obligations associated with being a public company is expensive and time-consuming, and any delays or difficulties in satisfying these obligations may have a material adverse effect on our results of operations and our stock price.
Certain data protection laws that apply to the 25 Company establish a private right of action. In addition, non-compliance with certain of these requirements could lead to investigations, regulatory enforcement actions, class actions or other private litigation based on theories that may include breach of contract or negligence, among others. Such litigation could result in material costs to the Company.
Certain data protection laws that apply to the Company establish a private right of action. In addition, non-compliance with certain of these requirements could lead to investigations, regulatory enforcement actions, class actions or other private litigation based on theories that may include breach of contract or negligence, among others. Such litigation could result in material costs to the Company.
If we fail to comply with the FAA’s many regulations and standards that apply to our activities, we could lose the FAA certifications, authorizations, or other approvals on which our manufacturing, installation, maintenance, preventive maintenance and alteration capabilities are based. In addition, from time to time, the FAA or comparable foreign agencies adopt new regulations or amend existing regulations.
If we fail to comply with the FAA’s many regulations and standards that apply to our activities, we could lose the FAA certifications, authorizations, or other 29 approvals on which our manufacturing, installation, maintenance, preventive maintenance and alteration capabilities are based. In addition, from time to time, the FAA or comparable foreign agencies adopt new regulations or amend existing regulations.
Almost all of our contracts with OEMs and dealers are terminable at will by either party on short notice. If one or more key OEMs or dealers terminates its relationship with us for any reason or our contract expires and is not renewed, our business and results of operations may be materially and adversely affected.
Almost all of our contracts with OEMs and dealers are terminable at will by either party on short notice. If one or more key OEMs or dealers terminates its relationship with us for any reason or our contract 16 expires and is not renewed, our business and results of operations may be materially and adversely affected.
Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.K. Bribery Act (the “Bribery Act”) and similar laws and regulations in other jurisdictions. These and other factors could affect our ability to compete successfully and expand internationally and, consequently, our business, financial condition and results of operations may be materially adversely affected.
Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.K. Bribery Act (the “Bribery Act”) and similar laws and regulations in other jurisdictions. These and other factors could affect our ability to compete successfully and continue to expand internationally and, consequently, our business, financial condition and results of operations may be materially adversely affected.
Such individuals have acquired specialized knowledge and skills with respect to Gogo and its operations. As a result, if any of our key personnel were to leave Gogo, we could face substantial difficulty in hiring qualified successors and could experience a loss of 17 productivity while any such successor obtains the necessary training and expertise.
Such individuals have acquired specialized knowledge and skills with respect to Gogo and its operations. As a result, if any of our key personnel were to leave Gogo, we could face substantial difficulty in hiring qualified successors and could experience a loss of productivity while any such successor obtains the necessary training and expertise.
Gogo 5G will be capable of working with different spectrum and supporting different next generation technologies. As previously disclosed, we are delayed in our commercial, nationwide launch of Gogo 5G due to a design error in a non-5G component of our chip, which was designed by a third-party subcontractor of our 5G solution provider.
Gogo 5G will be capable of working with different spectrum and supporting different next generation technologies. As previously disclosed, we are delayed in our commercial, nationwide launch of Gogo 5G due to a design error in a non-5G component of our chip, 24 which was designed by a third-party subcontractor of our 5G solution provider.
We may also maintain cyber liability insurance that covers certain damages caused by cyber incidents. However, there is no guarantee that adequate insurance will continue to be available at rates that we believe are reasonable or that the costs of responding to and recovering from a cyber incident will be covered by insurance or recoverable in rates.
We may also maintain cyber liability insurance that covers certain damages caused by cybersecurity incidents. However, there is no guarantee that adequate insurance will continue to be available at rates that we believe are reasonable or that the costs of responding to and recovering from a cybersecurity incident will be covered by insurance or recoverable in rates.
Such spectrum may not be available to us on commercially reasonable terms or at all. Our failure to obtain adequate spectrum could have a material adverse effect on our business, financial condition and results of operations. 20 Additional ATG spectrum, whether licensed or unlicensed, is or may become available in the future.
Such spectrum may not be available to us on commercially reasonable terms or at all. Our failure to obtain adequate spectrum could have a material adverse effect on our business, financial condition and results of operations. Additional ATG spectrum, whether licensed or unlicensed, is or may become available in the future.
In addition, following our retirement of end-of-life technologies and products, we may find that we have either obsolete or excess inventory on hand and might have to write off unusable inventory, which could have a material adverse effect on our results of operations. We may be unable to protect our intellectual property rights.
In addition, following our retirement of end-of-life technologies and products, we may find that we have either obsolete or excess inventory on hand and might have to write off unusable inventory, which could have a material adverse effect on our results of operations. 27 We may be unable to protect our intellectual property rights.
Any such security incidents, unauthorized access or disclosure, or other loss of information could result in legal claims or proceedings and liability under our contracts with certain customers, which generally require us to indemnify the customer for passenger and other third-party claims arising from data security breaches.
Any such cybersecurity incidents, unauthorized access or disclosure, or other loss of information could result in legal claims or proceedings and liability under our contracts with certain customers, which generally require us to indemnify the customer for passenger and other third-party claims arising from data security breaches.
Non-U.S. citizens should consider carefully the redemption provisions in our certificate of incorporation prior to investing in our common stock. 32 These restrictions may also decrease the liquidity and value of our stock by reducing the pool of potential investors in our company and making the acquisition of control of us by third parties more difficult.
Non-U.S. citizens should consider carefully the redemption provisions in our certificate of incorporation prior to investing in our common stock. These restrictions may also decrease the liquidity and value of our stock by reducing the pool of potential investors in our Company and making the acquisition of control of us by third parties more difficult.
As a result, either the Thorne Entities or GTCR alone is able to exercise influence over all matters requiring stockholder approval for the foreseeable future, including approval of significant corporate transactions and the election of directors. Such ability to influence may reduce the market price of our common stock.
As a result, either the Thorne Entities or GTCR alone is able to exercise influence over all matters requiring stockholder 37 approval for the foreseeable future, including approval of significant corporate transactions and the election of directors. Such ability to influence may reduce the market price of our common stock.
If we are unable to conclude that we have effective internal control over financial reporting, or if our independent registered public accounting firm is unable to provide us with an unqualified report regarding the effectiveness of our internal control over financial reporting, investors could lose confidence in the reliability of our consolidated financial statements.
In addition, if we are unable to conclude that we have effective internal control over financial reporting, or if our independent registered public accounting firm is unable to provide us with an unqualified report regarding the effectiveness of our internal control over financial reporting, investors could lose confidence in the reliability of our consolidated financial statements.
Our ability to offer in-flight broadband connectivity through our ATG service currently depends on our ability to maintain rights to use the 3 MHz ATG spectrum in the U.S., and our failure to do so may have a material adverse effect on our business, financial condition and results of operations.
Our ability to offer in-flight broadband connectivity through our ATG service currently depends on our ability to maintain rights to use the 3 MHz ATG spectrum in the U.S., and our failure to do so may have a material adverse effect on our business, financial 25 condition and results of operations.
The FAA could also change its policies regarding the delegation of inspection and certification responsibilities to private companies, which could adversely affect our business. To the 24 extent that any such new regulations or amendments to existing regulations or policies apply to our activities, our compliance costs would likely increase.
The FAA could also change its policies regarding the delegation of inspection and certification responsibilities to private companies, which could adversely affect our business. To the extent that any such new regulations or amendments to existing regulations or policies apply to our activities, our compliance costs would likely increase.
As a result of these security interests, such assets would only be available to satisfy claims of our general creditors or to holders of our equity securities, if we 29 were to become insolvent, to the extent the value of such assets exceeded the amount of our secured indebtedness and other obligations.
As a result of these security interests, such assets would only be available to satisfy claims of our general creditors or to holders of our equity securities, if we were to become insolvent, to the extent the value of such assets exceeded the amount of our secured indebtedness and other obligations.
We must comply with the CALEA, which requires applicable communications companies to ensure that their equipment, facilities and services can accommodate certain technical capabilities in executing authorized wiretapping and other electronic surveillance. Currently, our CALEA solution is fully deployed in our network.
We must comply with CALEA, which requires applicable communications companies to ensure that their equipment, facilities and services can accommodate certain technical capabilities in executing authorized wiretapping and other electronic surveillance. Currently, our CALEA solution is fully deployed in our network.
The adoption and implementation of new or more stringent international, federal, regional, state or local legislation, 27 regulations or other initiatives that impose more stringent standards for GHG emissions may have a material adverse effect on our results of operations and financial condition.
The adoption and implementation of new or more stringent international, federal, regional, state or local legislation, regulations or other initiatives that impose more stringent standards for GHG emissions may have a material adverse effect on our results of operations and financial condition.
Any such claims or litigation may be time-consuming and costly, divert management resources, require us to change our products and services, or require us to pay significant monetary damages, which may have a material adverse effect on our results of operations.
Any such claims or litigation may be time-consuming and costly, divert management resources, require us to change our products and services, or require us to pay significant monetary damages, which may have a material adverse effect on our results of 32 operations.
If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds available to pay the accelerated indebtedness or have the ability to refinance the accelerated indebtedness on terms favorable to us or at all.
If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds available to pay the accelerated indebtedness 35 or have the ability to refinance the accelerated indebtedness on terms favorable to us or at all.
If those changes result in significant and sustained reductions in our pre-tax income or utilization of existing tax carryforwards in future periods, additional valuation allowances may have to be recorded, which could have a material adverse impact on earnings and/or other comprehensive income. Increased attention to climate change, ESG matters and conservation measures may adversely impact our business.
If those changes result in significant and sustained reductions in our pre-tax income or utilization of existing tax carryforwards in future periods, additional valuation allowances may have to be recorded, which could have a material adverse impact on earnings and/or other comprehensive income. 22 Attention to climate change, conservation measures, and other ESG matters may adversely impact our business.
A few significant stockholders, including affiliates of Oakleigh Thorne, our Chair of the Board and CEO, and GTCR LLC and its affiliates, could exert influence over our company, and if the ownership of our common stock continues to be concentrated, or becomes more concentrated in the future, it could prevent our other stockholders from influencing significant corporate decisions.
A few significant stockholders, including affiliates of Oakleigh Thorne, the Executive Chair of our Board, and GTCR LLC and its affiliates, could exert influence over our Company, and if the ownership of our common stock continues to be concentrated, or becomes more concentrated in the future, it could prevent our other stockholders from influencing significant corporate decisions.
As a result, our employees’ or third parties’ intentional, unintentional, or inadvertent actions may increase our vulnerability or expose us to security threats, such as phishing attacks, and we may remain responsible for a successful phishing or other social engineering attack despite the quality and otherwise legal sufficiency of our technical security measures.
Furthermore, our employees’ or third parties’ intentional, unintentional, or inadvertent actions may increase our vulnerability or expose us to security threats, such as phishing attacks, and we may remain responsible for a successful phishing or other social engineering attack despite the quality and otherwise legal sufficiency of our technical security measures.
Our indebtedness outstanding under the Term Loan Facility bears interest, and any indebtedness under our Revolving Facility would bear interest, at variable rates. While we have entered into interest rate caps to hedge a portion of our exposure, we remain subject to interest rate risk under these facilities.
Our indebtedness outstanding under the 2021 Term Loan Facility and HPS Term Loan Facility bears interest, and any indebtedness under our Revolving Facility would bear interest, at variable rates. While we have entered into interest rate caps to hedge a portion of our exposure, we remain subject to interest rate risk under these Facilities.
See “ Risks Related to Our Business — Competition could result in price reduction, reduced revenue and loss of market position and could harm our results of operations .” Furthermore, under our agreement with Hughes we have committed to purchase, over a seven-year period, half duplex and full duplex antennas with an aggregate purchase price of approximately $170 million and $102 million, respectively, and we may make additional financial commitments in connection with Gogo Galileo.
See “— Competition could result in price reduction, reduced revenue and loss of market position and could harm our results of operations .” Furthermore, under our agreement with Hughes we have committed to purchase, over a seven-year period, half duplex and full duplex antennas with an aggregate purchase price of approximately $170 million and $102 million, respectively, and we may make additional financial commitments in connection with Gogo Galileo.
Our ability to comply with the covenants and restrictions contained in the 2021 Credit Agreement may be affected by economic, financial and industry conditions beyond our control. Our failure to comply with obligations under the agreements and instruments governing our indebtedness may result in an event of default under such agreements and instruments.
Our ability to comply with the covenants and restrictions contained in the Credit Agreements may be affected by economic, financial and industry conditions beyond our control. Our failure to comply with obligations under the agreements and instruments governing our indebtedness may result in an event of default under such agreements and instruments.
In addition, these restrictions could adversely affect our ability to attract equity financing or consummate an acquisition of a foreign entity using shares of our capital stock. 33 Item 1B. Unresolv ed Staff Comments None.
In addition, these restrictions could adversely affect our ability to attract equity financing or consummate an acquisition of a foreign entity using shares of our capital stock. 39 Item 1B. Unresolv ed Staff Comments None.
In that event, our assets would first be used to repay in full all indebtedness and other obligations under the 2021 Credit Agreement, resulting in all or a portion of our assets being unavailable to satisfy the claims of our unsecured indebtedness.
In that event, our assets would first be used to repay in full all indebtedness and other obligations under such Credit Agreement, resulting in all or a portion of our assets being unavailable to satisfy the claims of our unsecured indebtedness.
In addition, the Communications Act, from which the FCC obtains its authority, may be amended in the future in a manner that could be adverse to us. As discussed in more detail in the section entitled “Business—Licenses and Regulation—Federal Aviation Administration,” FAA approvals required to operate our business include STCs and PMAs.
In addition, the Communications Act, from which the FCC obtains its authority, may be amended in the future in a manner that could be adverse to us. As discussed in more detail in the section entitled “Item 1. Business—Licenses and Regulation—Federal Aviation Administration,” FAA approvals required to operate our business include STCs and PMAs.
The 2021 Credit Agreement contains covenants that, among other things, limit the ability of our subsidiaries and, in certain circumstances, us to: • incur certain non-permitted indebtedness; • pay dividends, redeem stock or make other distributions; • make certain investments; • create liens; • transfer or sell assets; • merge or consolidate with other companies; and • enter into certain transactions with our affiliates.
The Credit Agreements contains covenants that, among other things, limit the ability of our subsidiaries and, in certain circumstances, us to: • incur certain non-permitted indebtedness; • pay dividends, redeem stock or make other distributions; • make certain investments; • create liens; • transfer or sell assets; • merge or consolidate with other companies; and • enter into certain transactions with our affiliates.
The Communications Act and FCC regulations impose restrictions on foreign ownership of FCC licensees, as described in the above risk factor, “— Risks Related to Our Technology and Intellectual Property—If we fail to comply with the Communications Act and FCC regulations limiting ownership and voting of our capital stock by non-U.S. persons we could lose our FCC license .” Our corporate charter and bylaws include provisions that permit our Board of Directors to take certain actions in order to comply with FCC regulations regarding foreign ownership, including but not limited to, a right to redeem shares of common stock from non-U.S. citizens at prices at or below fair market value.
The Communications Act and FCC regulations impose restrictions on foreign ownership of FCC licensees, as described in the above risk factor, “— If we fail to comply with the Communications Act and FCC regulations limiting ownership and voting of our capital stock by non-U.S. persons we could lose our FCC license .” Our corporate charter and bylaws include provisions that permit our Board of Directors to take certain actions in order to comply with FCC regulations regarding foreign ownership, including but not limited to, a right to redeem shares of common stock from non-U.S. citizens at prices at or below fair market value.
We expect to have to invest significant capital to keep pace with innovation and changing technology, and if the amount of such investment exceeds our plans or the amount of investment permitted under the 2021 Credit Agreement (as defined below), it may have a material adverse effect on our results of operations.
We expect to have to invest significant capital to keep pace with innovation and changing technology, and if the amount of such investment exceeds our plans or the amount of investment permitted under the Credit Agreements (as defined below), it may have a material adverse effect on our results of operations.
Such consequences may materially adversely affect our business. 23 The failure of our equipment or material defects or errors in our software may damage our reputation, result in claims against us that exceed our insurance coverage, thereby requiring us to pay significant damages, and impair our ability to sell our service.
Such consequences may materially adversely affect our business. 28 The failure of our equipment or material defects or errors in our software or services may damage our reputation, result in claims against us that exceed our insurance coverage, thereby requiring us to pay significant damages, and impair our ability to sell our service.
We rely heavily on communications, information systems (both internal and provided by third parties), and the internet to conduct our business. Our brand, reputation and ability to attract, retain and serve our customers depend upon the reliable performance of our ground network and in-flight systems.
We rely heavily on communications, information systems (both internal and provided by third parties), and the internet to conduct our business. Our brand, reputation and ability to attract, retain and serve our customers depend upon the reliable performance of our ground network, in-flight systems and third-party satellite networks.
However, these breaches could have a material impact in the future, and there can be no assurance that any security measures we, or third parties, take will be effective in anticipating or preventing these activities, given the constantly changing nature of the threats.
However, these cybersecurity incidents could have a material impact in the future, and there can be no assurance that any security measures we, or third parties, take will be effective in anticipating or preventing these activities, given the constantly changing nature of the threats.
In the future, if our subsidiaries are in compliance with certain incurrence ratios or other covenant exceptions set forth in the 2021 Credit Agreement, our subsidiaries may be able to incur additional indebtedness, which indebtedness may be secured or unsecured, the incurrence of which may increase the risks created by our current substantial indebtedness.
In the future, if our subsidiaries are in compliance with certain incurrence ratios or other covenant exceptions set forth in the Credit Agreements, our subsidiaries may be able to incur additional indebtedness, which indebtedness may be secured or unsecured, the incurrence of which may increase the risks created by our current substantial indebtedness.
There can be no assurance that we will launch Gogo Galileo in sufficient time to effectively compete in the global business aviation market, if at all, due to, among other things, risks associated with: (i) the failure of our equipment and software to perform as expected; (ii) the failure of the Eutelsat OneWeb network to perform as expected; (iii) difficulties in integrating our hardware and software with the Eutelsat OneWeb network; (iv) problems arising in the manufacturing process; (v) our inability to negotiate contracts with suppliers on acceptable commercial and other terms; (vi) our reliance on single-source suppliers for the development and manufacturing of the antenna and access to a LEO network; and (vii) delays in obtaining or failures to obtain the required regulatory approvals for installation and operation of such equipment and the provision of service to passengers.
There can be no assurance that Gogo Galileo will effectively compete in the global business aviation market due to, among other things, risks associated with: (i) the failure of our equipment and software to perform as expected; (ii) the failure of the Eutelsat OneWeb network to perform as expected; (iii) difficulties in integrating our hardware and software with the Eutelsat OneWeb network; (iv) problems arising in the manufacturing process; (v) our inability to negotiate contracts with suppliers on acceptable commercial and other terms; (vi) our reliance on single-source suppliers for the development and manufacturing of the antenna and access to a LEO network; and (vii) delays in obtaining or failures to obtain the required regulatory approvals for installation and operation of such equipment and the provision of service to passengers.
They include: • aviation industry or general market conditions, including those related to disruptions to supply chains and installations; • domestic and international economic factors unrelated to our performance; • changes in technology or customer usage of Wi-Fi and Internet broadband services; • any inability to timely and efficiently roll out Gogo 5G, Gogo Galileo or other components of our technology roadmap; • new regulatory pronouncements and changes in regulatory guidelines; • actual or anticipated fluctuations in our quarterly operating results and any inability to generate positive cash flows on a consolidated basis in the future or to obtain additional financing; • changes in or failure to meet publicly disclosed expectations as to our future financial performance; • changes in securities analysts’ estimates of our financial performance or lack of research and reports by industry analysts; • action by institutional stockholders or other large stockholders, including future sales; • short-selling or other transactions involving derivatives of our securities; • speculation in the press or investment community; • investor perception of us and our industry; • changes in market valuations or earnings of similar companies; • announcements by us or our competitors of significant products, contracts, contract amendments, acquisitions or strategic partnerships; • developments or disputes concerning patents or proprietary rights, including increases or decreases in litigation expenses associated with intellectual property lawsuits we may initiate, or in which we may be named as defendants; • failure to complete significant sales; 30 • any future sales of our common stock or other securities; • renewal of our FCC licenses and our ability to obtain additional spectrum; and • additions or departures of key personnel.
They include: • aviation industry or general market conditions, including those related to disruptions to supply chains and installations; • domestic and international economic factors unrelated to our performance; • changes in technology or customer usage of Wi-Fi and Internet broadband services; • any inability to timely and efficiently roll out Gogo 5G, Gogo Galileo or other components of our technology roadmap; • the success of our integration of Satcom Direct; • new regulatory pronouncements and changes in regulatory guidelines; • actual or anticipated fluctuations in our quarterly operating results and any inability to generate positive cash flows on a consolidated basis in the future or to obtain additional financing; • changes in or failure to meet publicly disclosed expectations as to our future financial performance, or failure to estimate them accurately; • changes in securities analysts’ estimates of our financial performance or lack of research and reports by industry analysts; 36 • action by institutional stockholders or other large stockholders, including future sales; • short-selling or other transactions involving derivatives of our securities; • speculation in the press or investment community, and/or unfavorable reports by investors such as short sellers; • investor perception of us and our industry; • changes in market valuations or earnings of similar companies; • announcements by us or our competitors of significant products, contracts, contract amendments, acquisitions or strategic partnerships; • developments or disputes concerning patents or proprietary rights, including increases or decreases in litigation expenses associated with intellectual property lawsuits we may initiate, or in which we may be named as defendants; • failure to complete significant sales; • any future sales of our common stock or other securities; • renewal of our FCC licenses and our ability to obtain additional spectrum; and • additions or departures of key personnel.
Due to a shortfall in the amount appropriated by Congress to fund the FCC Reimbursement Program, approximately $132 million of the approved amount is currently allocated to the Company under the program. In July 2023, the Company elected to participate in the partially funded FCC Reimbursement Program and submitted its first reimbursement claim.
Due to an initial shortfall in the amount appropriated by Congress to fund the FCC Reimbursement Program, approximately $132 million of the approved amount is currently allocated to the Company under the program. In July 2023, the Company elected to participate in the partially funded FCC Reimbursement Program and submitted its first reimbursement claim.
As we expand internationally, we expect that we would be subject to additional risks related to conducting operations outside the United States, including, but not limited to: • difficulties in penetrating new markets due to established and entrenched competitors; • difficulties in developing products and services that are tailored to the needs of local customers; • the need to adapt and localize our products and services for specific countries; • lack of local acceptance or knowledge of our products and services; • changes in a specific country’s or region’s political or economic conditions; • difficulties in obtaining required regulatory or other governmental approvals; • greater difficulty in enforcing contracts and managing collections in countries where our recourse may be more limited, as well as longer collection periods; • multiple and possibly overlapping tax structures; • unexpected changes in laws and regulatory requirements, including with respect to taxes and trade laws; • more stringent regulations relating to communications; privacy and data security and the unauthorized use of, or access to, commercial and personal data; and aerospace and liability standards; 16 • challenges inherent in efficiently managing employees over large geographic distances, including compliance with differing labor laws and the need to implement appropriate systems, policies and hiring, benefits and compliance programs; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems and regulatory systems; • increased costs associated with international operations, including travel, real estate, infrastructure and legal compliance costs; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses and the cost and risk of entering into hedging transactions if we chose to do so in the future; • the effect of other economic factors, including inflation, pricing and currency devaluation; • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general preferences for local vendors; • operating in new, developing or other markets in which there are significant uncertainties regarding the interpretation, application and enforceability of laws and regulations, including relating to contract and intellectual property rights; • limited or insufficient intellectual property protection or difficulties enforcing our intellectual property; • political instability, social unrest, terrorist activities, acts of civil or international hostility, such as the ongoing conflict between Russia and Ukraine, natural disasters and regional or global outbreaks of contagious diseases; • restrictions on the ability of U.S. companies to do business in foreign countries; and • exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S.
As a result, we are subject to risks related to conducting operations outside the United States, including, but not limited to: • difficulties in penetrating new markets due to established and entrenched competitors; • difficulties in developing products and services that are tailored to the needs of local customers; • the need to adapt and localize our products and services for specific countries; • lack of local acceptance or knowledge of our products and services; • changes in a specific country’s or region’s political or economic conditions; • difficulties in obtaining required regulatory or other governmental approvals; • greater difficulty in enforcing contracts and managing collections in countries where our recourse may be more limited, as well as longer collection periods; • multiple and possibly overlapping tax structures; • unexpected changes in laws and regulatory requirements, including with respect to taxes and trade laws; • more stringent regulations relating to communications; artificial intelligence; privacy and data security and the unauthorized use of, or access to, commercial and personal data; and aerospace and liability standards; • challenges inherent in efficiently managing employees over large geographic distances, including compliance with differing labor laws and the need to implement appropriate systems, policies and hiring, benefits and compliance programs; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems and regulatory systems; • increased costs associated with international operations, including travel, real estate, infrastructure and legal compliance costs; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses and the cost and risk of entering into hedging transactions if we chose to do so in the future; • the effect of other economic factors, including inflation, pricing and currency devaluation; • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general preferences for local vendors or imposing local domestic ownership restrictions; 20 • operating in new, developing or other markets in which there are significant uncertainties regarding the interpretation, application and enforceability of laws and regulations, including relating to contract and intellectual property rights; • limited or insufficient intellectual property protection or difficulties enforcing our intellectual property; • political instability, social unrest, terrorist activities, acts of civil or international hostility, such as the ongoing conflict between Russia and Ukraine, the ongoing conflict in the wider Middle East and tensions in the South China Sea, natural disasters and regional or global outbreaks of contagious diseases; • restrictions on the ability of U.S. companies to do business in foreign countries; and • exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S.
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below. Risks Related to Our Business We may be unable to continue to generate revenue from the provision of our connectivity services, which could materially and adversely affect our business and profitability.
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below. Risks Related to Our Business We may be unable to continue to generate revenue from the provision of our connectivity and other service offerings, which could materially and adversely affect our business and profitability.
We may be unable to secure additional financing on favorable terms or at all or our operating cash flows may be insufficient to satisfy our financial obligations under the 2021 Credit Agreement and other indebtedness outstanding from time to time.
We may be unable to secure additional financing on favorable terms or at all or our operating cash flows may be insufficient to satisfy our financial obligations under the Credit Agreements and other indebtedness outstanding from time to time.
See “ — Risks Related to Litigation and Regulation — We may be affected by global climate change or by legal and regulatory responses to such change. ” Increased awareness and any adverse publicity in the global marketplace about the GHGs emitted by companies in the airline and transportation industries could harm our reputation and reduce customer demand for our services.
See “ — We may be affected by global climate change or by legal and regulatory responses to such change. ” Increased awareness and any adverse publicity in the global marketplace about the GHGs emitted by companies in the airline and transportation industries could harm our reputation and reduce customer demand for our services.
We may not be as successful as our competitors at recruiting, training, retaining and utilizing these highly skilled personnel. Any failure to recruit, train and retain highly skilled employees may have a material adverse effect on our business. We depend on the continued service and performance of our key personnel, including Oakleigh Thorne, our CEO.
We may not be as successful as our competitors at recruiting, training, retaining and utilizing these highly skilled personnel. Any failure to recruit, train and retain highly skilled employees may have a material adverse effect on our business. We depend on the continued service and performance of our key personnel.
Additionally, as discussed in more detail in the section titled “Business—Licenses and Regulation—Privacy and Data Security-Related Regulations,” we are subject to certain state laws, federal and non-U.S. laws that impose data breach notification requirements, specific data security obligations, or other consumer privacy-related requirements.
Additionally, as discussed in more detail in the section titled “Item 1. Business—Licenses and Regulation—Privacy and Data Security-Related Regulations,” we are subject to certain state laws, federal and non-U.S. laws that impose data breach notification requirements, specific data security obligations, or other consumer privacy-related requirements.
In addition, global logistics issues such as shipping logjams, workforce shortages and carrier capacity constraints, continue to negatively affect our ability to obtain electronic and other components on a timely basis.
In addition, global logistics issues such as shipping logjams, workforce shortages and carrier capacity constraints, have affected and may continue to negatively affect our ability to obtain electronic and other components on a timely basis.
To date, none of these breaches or attempts has, individually or in the aggregate, resulted in a security incident with a material effect on our operations or our financial condition, results of operations, liquidity, or cash flows.
To date, none of these cybersecurity incidents or attempts has, individually or in the aggregate, resulted in a security incident with a material effect on our operations or our financial condition, results of operations, liquidity, or cash flows.
Under the terms of the 2021 Credit Agreement, a takeover of our company would allow the administrative agent and/or the lenders to terminate their commitments under the 2021 Credit Agreement and declare any and all outstanding amounts to be due and payable.
Under the terms of the Credit Agreements, a takeover of our Company would allow the administrative agent and/or the lenders to terminate their commitments under the Credit Agreements and declare any and all outstanding amounts to be due and payable.
Accordingly, if an event of default were to occur under the 2021 Credit Agreement, to the extent amounts were outstanding under the Facilities, the lenders party to the 2021 Credit Agreement would have a prior right to our assets, to the exclusion of our general creditors in the event of our bankruptcy, insolvency, liquidation, or reorganization.
Accordingly, if an event of default were to occur under any of the Credit Agreements, to the extent amounts were outstanding under the Facilities, the lenders party to such Credit Agreement would have a prior right to our assets, to the exclusion of our general creditors in the event of our bankruptcy, insolvency, liquidation, or reorganization.
Concern over climate change, including the impact of global warming, has led to significant U.S. and international legislative and regulatory efforts to limit greenhouse gas (“GHG”) emissions.
Concern over climate change, including the impact of global warming, has in recent years led to significant U.S. and international legislative and regulatory efforts to limit greenhouse gas (“GHG”) emissions.
In addition, the existence of these security interests may adversely affect our financial flexibility. Indebtedness under the Facilities is secured by a lien on substantially all of our assets.
In addition, the existence of these security interests may adversely affect our financial flexibility. Indebtedness under the Facilities (as defined below) is secured by a lien on substantially all of our assets.
Additionally, while we expect to launch Gogo 5G in the fourth quarter of 2024, we cannot assure you that the 5G launch or our launch of other next generation technologies will in fact occur in sufficient time to meet growing user expectations regarding the in-flight connectivity experience and to effectively compete in the business aviation market.
Additionally, while we expect to deliver revenue from Gogo 5G in the fourth quarter of 2025, we cannot assure you that the 5G launch or our launch of other next generation technologies will in fact occur in sufficient time to meet growing user expectations regarding the in-flight connectivity experience and to effectively compete in the business aviation market.
Risks Related to Our Indebtedness For definitions of capitalized terms used and not defined in the following Risk Factors, see “Management's Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K.
Risks Related to Our Indebtedness For definitions of capitalized terms used and not defined in the following Risk Factors, see “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K.
For more information, see “— We could be adversely affected if we or our third party suppliers or service providers suffer service interruptions or delays, technology failures, damage to equipment or system disruptions or failures arising from, among other things, force majeure events, cyberattacks or other malicious activities. ” Our use of open-source software could limit our ability to commercialize our technology.
For more information, see “— We periodically are and could be in the future adversely affected if we or our third party suppliers or service providers suffer service interruptions or delays, technology failures, damage to equipment or system disruptions or failures arising from, among other things, force majeure events, cyberattacks or other malicious activities. ” Our use of open-source software could limit our ability to commercialize our technology.
Our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or general corporate purposes is limited by the 2021 Credit Agreement.
Our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or general corporate purposes is limited by the Credit Agreements.
In addition to the factors discussed in this Annual Report on Form 10-K, the trading price of our common stock may fluctuate widely in response to various factors, many of which are beyond our control.
In addition to the factors discussed in this Annual Report on Form 10-K, the trading price of our common stock has fluctuated and may continue to fluctuate widely in response to various factors, many of which are beyond our control.
For example, we are dedicated to creating and maintaining a diverse and inclusive culture and to having every employee feel like they have a home at our company, and our expansion may hinder these efforts. This, in turn, could adversely affect our business, results of operations and financial condition.
For example, we are dedicated to having every employee feel like they have a home at our Company, and our expansion may hinder these efforts. This, in turn, could adversely affect our business, results of operations and financial condition.
In order to participate in the program, we must comply with various conditions and requirements established by the FCC, including a requirement that we complete the removal, replacement and disposal of applicable equipment within one year of receiving our first funding disbursement (i.e., by July 21, 2024).
In order to participate in the program, we must comply with various conditions and requirements established by the FCC, including a requirement that we complete the removal, replacement and disposal of applicable equipment within one year of receiving our first funding disbursement.
A downgrade, suspension or withdrawal of the rating assigned by a rating agency to us, our subsidiaries or our indebtedness, if any, could cause our cost of capital to increase. Our Term Loan has been rated by nationally recognized rating agencies and may in the future be rated by additional rating agencies.
A downgrade, suspension or withdrawal of the rating assigned by a rating agency to us, our subsidiaries or our indebtedness, if any, could cause our cost of capital to increase. Our 2021 Term Loan Facility and HPS Term Loan Facility have been rated by nationally recognized rating agencies and may in the future be rated by additional rating agencies.
This includes new regulations, such as those related to net neutrality, broadband labeling, and digital discrimination recently adopted or proposed by the FCC, or other potential regulatory requirements. We are unable to predict the impact of regulations and other policy changes that could be adopted by the various governmental entities that oversee portions of our business.
This includes new regulations, such as those related to net neutrality, broadband labeling, digital discrimination, the Universal Service Fund, or other potential regulatory requirements. We are unable to predict the impact of regulations and other policy changes that could be adopted by the various governmental entities that oversee portions of our business.
We are required to indemnify the directors and current and former officers who are defendants in the derivative lawsuit for their defense costs and any judgments resulting from such suits. In the future, we may be subject to additional securities class action or derivative litigation.
We also indemnify the directors and current and former officers who are defendants in Company litigation and in derivative lawsuits for their defense costs and any judgments resulting from such suits. In the future, we may be subject to additional securities class action or derivative litigation.
Companies that do not adapt to or comply with investor or other stakeholder expectations and standards, which are evolving, or that are perceived to have not responded appropriately to the growing concern regarding ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and other adverse consequences.
Companies that do not adapt to or comply with investor or other stakeholder expectations and standards, or that are perceived to have not responded appropriately to concerns regarding ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and other adverse consequences.
Thorne owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders. As a stockholder, Mr.
Thorne provides strategic leadership to the Company, and he owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders. As a stockholder, Mr.
To date, none of these cyberattacks has, individually or in the aggregate, resulted in a security incident with a material effect on our operations or our financial condition, results of operations, liquidity, or cash flows. However, these cyberattacks could have a material impact in the future.
To date, none of these cyberattacks has, individually or in the aggregate, resulted in a cybersecurity incident with a material effect on our operations or our financial condition, results of operations, liquidity, or cash flows, but they could have a material impact in the future.
Negative conditions in the general economy both in the United States and globally, including conditions resulting from changes in gross domestic product growth, declines in consumer confidence, labor shortages, inflationary pressures, rising interest rates, and financial and credit market fluctuations could cause a decrease in business investments, including spending on air travel and otherwise, and could materially and adversely affect the growth of our business.
Negative conditions in the general economy both in the United States and globally, including conditions resulting from changes in gross domestic product growth, declines in consumer confidence, labor shortages, inflationary pressures, rising interest rates, changes in government and election results in the United States and other jurisdictions in which we operate and financial and credit market fluctuations could cause a decrease in business investments, including spending on air travel and otherwise, and could materially and adversely affect the growth of our business.
Events beyond our control can affect our ability to comply with these requirements. The 2021 Credit 28 Agreement also limits the ability of Gogo Inc. to incur additional indebtedness under certain circumstances and limits the amount of cash that our subsidiaries may dividend, transfer or otherwise distribute to us.
Events beyond our control can affect our ability to comply with these requirements. The Credit Agreements also limit the ability of Gogo Inc. to incur additional indebtedness under certain circumstances and limit the amount of cash that our subsidiaries may dividend, transfer or otherwise distribute to us.
We and our vendors, like other commercial entities, have been, and will likely continue to be, subject to a variety of forms of cyberattacks with the objective of gaining unauthorized access to our systems and data or disrupting our operations.
We and our vendors, like other commercial entities, have been, and will likely continue to be, subject to various forms of cyberattacks from a wide variety of sources/malicious actors, with the objective of gaining unauthorized access to our systems and data or disrupting our operations.
For the fiscal years ended December 31, 2023, 2022 and 2021, the Gogo service we provided on business aircraft (which excludes service provided on commercial aircraft under an ATG network sharing agreement with Intelsat) generated approximately 78%, 71% and 75% of our revenue from continuing operations, respectively.
For the fiscal years ended December 31, 2024, 2023 and 2022, the service we provided (which excludes service provided on commercial aircraft under an ATG network sharing agreement with Intelsat) generated approximately 80%, 78% and 71% of our revenue from operations, respectively.
The utilization of our tax losses could be substantially limited if we experienced an “ownership change” as defined in the Internal Revenue Code. As of December 31, 2023, we had approximately $446 million in federal and $377 million in state net operating losses (“NOLs”). The federal NOLs will begin to expire in 2034.
The utilization of our tax losses could be substantially limited if we experienced an “ownership change” as defined in the Internal Revenue Code. As of December 31, 2024, we had approximately $363 million in federal and $356 million in state net operating losses (“NOLs”). The federal NOLs will begin to expire in 2034. The state NOLs began expiring in 2024.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWhile we have experienced cybersecurity incidents, to date, we do not believe that we have experienced a material cybersecurity incident during the fiscal year ended December 31, 2023.
Biggest changeWe have insurance designed to cover certain expenses relating to cybersecurity incidents; however, damage and claims arising from a cybersecurity incident may exceed the amount of any insurance available. While we have experienced cybersecurity incidents, to date, we do not believe that we experienced a material cybersecurity incident during the fiscal year ended December 31, 2024.
The Cybersecurity CFT provides a forum for these cross-functional members of management to: consider emerging technologies, such as artificial intelligence and emerging cybersecurity risks; review cybersecurity and privacy regulations; approve, review and update policies and standards as appropriate; and promote cross-functional collaboration to manage cybersecurity and privacy risks across the enterprise. • The Gogo Executive Cybersecurity Committee (the “GECC”) is comprised of executive leadership and members of the cybersecurity, operations, risk, legal, and internal audit teams.
The Cybersecurity CFT meets at least quarterly (or more frequently as needed) and provides a forum for these cross-functional members of management to: consider emerging technologies, such as artificial intelligence and emerging cybersecurity risks; review cybersecurity and privacy regulations; approve, review and update policies and standards as appropriate; and promote cross-functional collaboration to manage cybersecurity and privacy risks across the enterprise. • The Gogo Executive Cybersecurity Committee (the “GECC”) is comprised of executive leadership and members of the cybersecurity, operations, risk, legal, and internal audit teams.
We also have management level committees and a cybersecurity incident team who support our processes to assess and manage cybersecurity risk as follows: • The Cybersecurity Cross Functional Team (the “Cybersecurity CFT”), led by our Vice President, Network Engineering, Product Development and Operations, brings together IT, legal, compliance and other function heads.
We also have management level committees and a cybersecurity incident team who support our processes to assess and manage cybersecurity risk as follows: • The Cybersecurity Cross Functional Team (the “Cybersecurity CFT”), led by our CISO, brings together IT, legal, compliance and other function heads.
As a foundation of this approach, we have implemented a layered governance structure to help assess, identify, manage and report cybersecurity risks. Our cybersecurity program is aligned to the National Institute of Standards and Technology’s Cybersecurity Framework (“NIST”), which outlines the core components and responsibilities necessary to sustain a healthy and well-balanced cybersecurity program.
As a foundation of this approach, we have implemented a layered governance structure to help assess, identify, manage and report cybersecurity risks. Our cybersecurity program leverages the NIST Framework, which outlines the core components and responsibilities necessary to sustain a healthy and well-balanced cybersecurity program.
The output of each of the foregoing committees are collected and analyzed on a regular basis and our Vice President, Network Engineering, Product Development and Operations briefs the Audit Committee, through quarterly updates as well as on an ad hoc basis between regular updates to the extent needed.
The output of each of the foregoing committees are collected and analyzed on a regular basis and our CISO briefs the Audit Committee, through quarterly updates as well as on an ad hoc basis between regular updates to the extent needed.
Removed
Our Vice President, Network Engineering, Product Development and Operations serves as the leader of our cybersecurity team and has over 25 years of experience working in information technology, specializing in network security.
Added
Our Senior Vice President , Chief Information Security Officer (“CISO”), leads our cybersecurity team and has over 15 years of experience establishing and leading comprehensive cybersecurity programs. Our CISO retired from the United States Navy, where he served in various roles with increasing responsibility, most recently serving as the Director of Operations – Navy Cyber Defense 40 Operations Command.
Removed
The leader of our cybersecurity team has spent the last 17 years working for us in a variety of roles and as a result has in-depth knowledge of the Company’s IT and Cyber ecosystem. We believe that his technical expertise combined with his business acumen and education, positions him well to lead Gogo’s cybersecurity program.
Added
In that role, our CISO led a team of 450 personnel overseeing networks with more than 800,000 endpoints and more than 200 IT, Cloud, Legacy, and Operational Technology networks globally.
Removed
In addition to oversight of cybersecurity, our Vice President, Network 34 Engineering, Product Development and Operations oversees (i) infrastructure management, (ii) the implementation and compliance of our information security standards, and (iii) mitigation of information security related risks.
Added
We believe that our CISO’s technical expertise and background assist us with the navigation of the extensive regulatory framework to which we are subject as a federal contractor, including the achievement of the Cybersecurity Maturity Model Certification (“CMMC”) program. We believe we are well-positioned to meet the requirements of CMMC and are preparing for certification.
Added
With respect to third party service providers, we obligate our vendors to adhere to privacy and cybersecurity measures, and we perform risk assessments of vendors, including their ability to protect data from unauthorized access.

Item 2. Properties

Properties — owned and leased real estate

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Removed
Item 2. Pr operties Currently, we lease approximately 120,000 square feet for our business in Broomfield, Colorado, under a lease agreement that expires in 2029. In addition, we lease approximately 11,700 square feet in Chicago, Illinois for those of our employees who live in the metropolitan Chicago area under a lease agreement that expires on May 31, 2032.
Added
Item 2. Pr operties We lease our corporate headquarters office located in Broomfield, Colorado which is used by our senior management as well as by the Gogo BA segment for sales, research and development, customer service and administrative purposes. The Gogo BA segment also leases a warehouse in Broomfield and an office in Chicago, Illinois .
Removed
We believe that our existing facilities will be adequate for the foreseeable future.
Added
The Broomfield headquarters lease expires in 2029. The Satcom Direct segment owns and occupies two properties in Melbourne, Florida, which house its main corporate facility and data center. The main corporate facility is currently listed for sale.
Added
Satcom Direct also leases an engineering and manufacturing facility in Ottawa, Canada as well as two offices in the United States and seven offices internationally. We believe that our current facilities are adequate for the foreseeable future.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings We are subject to several lawsuits arising out of the conduct of our business. See Note 15, “Commitments and Contingencies,” to our consolidated financial statements for a discussion of litigation matters. From time to time we may become involved in legal proceedings arising in the ordinary course of our business.
Biggest changeItem 3. Legal Proceedings We are subject to several lawsuits arising out of the conduct of our business. See Note 17, “Commitments and Contingencies,” to our consolidated financial statements for a discussion of litigation matters. From time to time we may become involved in legal proceedings arising in the ordinary course of our business.
Item 4. Mine Saf ety Disclosures Not applicable. 35 Part II
Item 4. Mine Saf ety Disclosures Not applicable. 41 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeConsolidated Statements of Operations (in thousands) For the Years Ended December 31, 2023 2022 2021 Revenue: Service revenue $ 318,015 $ 296,329 $ 259,583 Equipment revenue 79,562 107,738 76,133 Total revenue 397,577 404,067 335,716 Operating expenses: Cost of service revenue (exclusive of items shown below) 69,568 64,427 56,103 Cost of equipment revenue (exclusive of items shown below) 63,383 71,473 46,092 Engineering, design and development 36,683 29,587 24,874 Sales and marketing 29,797 25,471 20,985 General and administrative 57,280 58,203 51,554 Depreciation and amortization 16,701 12,580 15,482 Total operating expenses 273,412 261,741 215,090 Operating income 124,165 142,326 120,626 Other expense (income): Interest income (7,403 ) (2,386 ) (191 ) Interest expense 33,056 38,872 67,472 Loss on extinguishment of debt and settlement of convertible notes 2,224 — 83,961 Other (income) expense, net (1,315 ) 123 25 Total other expense 26,562 36,609 151,267 Income (loss) from continuing operations before income taxes 97,603 105,717 (30,641 ) Income tax (benefit) provision (48,075 ) 13,658 (187,230 ) Net income from continuing operations 145,678 92,059 156,589 Net loss from discontinued operations, net of tax — — (3,854 ) Net income $ 145,678 $ 92,059 $ 152,735 Years Ended December 31, 2023 and 2022 Revenue: Revenue and percent change for the years ended December 31, 2023 and 2022 were as follows (in thousands, except for percent change) : For the Years Ended December 31, % Change 2023 2022 2023 over 2022 Service revenue $ 318,015 $ 296,329 7.3 % Equipment revenue 79,562 107,738 (26.2 )% Total revenue $ 397,577 $ 404,067 (1.6 )% Total revenue decreased to $397.6 million for the year ended December 31, 2023, as compared with $404.1 million for the prior year, due to a decrease in equipment revenue, partially offset by an increase in service revenue.
Biggest changeConsolidated Statements of Operations (in thousands) For the Years Ended December 31, 2024 2023 2022 Gogo BA Satcom Direct Total Gogo BA Gogo BA Revenue: Service revenue $ 327,056 $ 37,214 $ 364,270 $ 318,015 $ 296,329 Equipment revenue 77,450 2,989 80,439 79,562 107,738 Total revenue 404,506 40,203 444,709 397,577 404,067 Operating expenses: Cost of service revenue (exclusive of items shown below) 74,927 24,115 99,042 69,568 64,427 Cost of equipment - product 45,575 46,672 56,676 Cost of equipment - other 18,146 16,711 14,797 Total cost of equipment revenue (exclusive of items shown below) 63,721 3,840 67,561 63,383 71,473 Engineering, design and development 43,465 1,307 44,772 36,683 29,587 Sales and marketing 36,082 1,938 38,020 29,797 25,471 General and administrative 98,231 26,840 125,071 57,280 58,203 Depreciation and amortization 15,287 3,685 18,972 16,701 12,580 Total operating expenses 331,713 61,725 393,438 273,412 261,741 Operating income (loss) 72,793 (21,522 ) 51,271 124,165 142,326 Other expense (income): Interest income (8,336 ) — (8,336 ) (7,403 ) (2,386 ) Interest expense 38,431 — 38,431 33,056 38,872 Loss on extinguishment of debt — — — 2,224 — Other (income) expense, net 3,042 — 3,042 (1,315 ) 123 Total other expense 33,137 — 33,137 26,562 36,609 Income (loss) before income taxes 39,656 (21,522 ) 18,134 97,603 105,717 Income tax provision (benefit) 4,388 — 4,388 (48,075 ) 13,658 Net income (loss) $ 35,268 $ (21,522 ) $ 13,746 $ 145,678 $ 92,059 Comparison of Years Ended December 31, 2024 and 2023 Below is a discussion of changes in the results in operations for the years ended 2024 and 2023, which as discussed above are for the Gogo BA segment only.
We define ATG AVANCE aircraft online as the total number of business aircraft equipped with our AVANCE L5 or L3 system for which we provide ATG services as of the last day of each period presented. • Gogo Biz aircraft online.
We define AVANCE aircraft online as the total number of business aircraft equipped with our AVANCE L5 or L3 system for which we provide ATG services as of the last day of each period presented. • Gogo Biz aircraft online.
Cost of Revenue: Cost of service revenue consists of ATG network costs, satellite provider service costs, transaction costs and costs related to network operations. Cost of equipment revenue primarily consists of the costs of purchasing component parts used in the manufacture of our equipment and the production, installation, technical support and quality assurance costs associated with the equipment sales.
Cost of Revenue: Cost of service revenue consists of ATG network costs, satellite network provider service costs, transaction costs and costs related to network operations. Cost of equipment revenue primarily consists of the costs of purchasing component parts used in the manufacture of our equipment and the production, installation, technical support and quality assurance costs associated with the equipment sales.
Key factors that may affect our future performance include: • costs associated with the implementation of, and our ability to implement on a timely basis, our technology roadmap, including upgrades to and installation of the ATG technologies we currently offer, Gogo 5G, Gogo Galileo and any other next generation or other new technology; • our ability to manage issues and related costs that may arise in connection with the implementation of our technology roadmap, including technological issues and related remediation efforts and failures or delays on the part of antenna, chipset, and other equipment developers and providers or satellite network providers, some of which are single-source; • our ability to license additional spectrum and make other improvements to our network and operations as technology and user expectations change; • the number of aircraft in service in our markets, including consolidations or changes in fleet size by one or more of our large-fleet customers; • the economic environment and other trends that affect both business and leisure aviation travel; 38 • disruptions to supply chains in the aviation industry and installations of our equipment driven by, among other things, labor shortages; • the extent of our customers’ adoption of our products and services, which is affected by, among other things, willingness to pay for the services that we provide, the quality and reliability of our products and services, changes in technology and competition from current competitors and new market entrants; • our ability to engage suppliers of equipment components and network services on a timely basis and on commercially reasonable terms; • our ability to fully utilize portions of our deferred income tax assets; • changes in laws, regulations and interpretations affecting telecommunications services globally, including those affecting our ability to maintain our licenses for ATG spectrum in the United States, obtain sufficient rights to use additional ATG spectrum and/or other sources of broadband connectivity to deliver our services, including Gogo Galileo, expand our service offerings and manage our network; and • changes in laws, regulations and policies affecting our business or the business of our customers and suppliers globally, including changes that impact the design of our equipment and our ability to obtain required certifications for our equipment.
Key factors that may affect our future performance include: • costs associated with the implementation of, and our ability to implement on a timely basis, our technology roadmap, including upgrades to and installation of the ATG Broadband technologies we currently offer, Gogo 5G, Gogo Galileo, LTE and any other next generation or other new technology that we develop or acquire; • our ability to manage issues and related costs that may arise in connection with the implementation of our technology roadmap, including technological issues and related remediation efforts and failures or delays on the part of antenna, chipset, and other equipment developers and providers or satellite network providers, some of which are single-source; • our ability to license additional spectrum and make other improvements to our ATG network and operations as technology and user expectations change; • the number of aircraft in service in our markets, including consolidations or changes in fleet size by one or more of our large-fleet customers; • the economic environment and other trends that affect both business and leisure aviation travel; • disruptions to supply chains in the aviation industry and installations of our equipment driven by, among other things, labor shortages; 44 • the extent of our customers’ adoption of our products and services, which is affected by, among other things, willingness to pay for the services that we provide, the quality and reliability of our products and services, changes in technology and competition from current competitors and new market entrants; • our ability to engage suppliers of equipment components and network services on a timely basis and on commercially reasonable terms; • our ability to fully utilize portions of our deferred income tax assets; • changes in laws, regulations and interpretations affecting telecommunications services globally, including those affecting our ability to maintain our licenses for ATG spectrum in the United States, obtain sufficient rights to use additional ATG spectrum and/or other sources of broadband connectivity to deliver our services, including Gogo Galileo, expand our service offerings and manage our network; and • changes in laws, regulations and policies affecting our business or the business of our customers and suppliers globally, including changes that impact the design of our equipment and our ability to obtain required certifications for our equipment.
The S&P SmallCap 600 was chosen because we do not believe we can reasonably identify an industry index or specific peer issuer that would offer a meaningful comparison. The S&P SmallCap 600 represents a broad-based index of companies with similar market 36 capitalization.
The S&P SmallCap 600 was chosen because we do not believe we can reasonably identify an industry index or specific peer issuer that would offer a meaningful comparison. The S&P SmallCap 600 represents a broad-based index of companies with similar market 42 capitalization.
The graph assumes that $100 was invested at the market close on December 31, 2018 in our common stock, the NASDAQ Composite and the S&P SmallCap 600 and assumes reinvestments of dividends, if any.
The graph assumes that $100 was invested at the market close on December 31, 2019 in our common stock, the NASDAQ Composite and the S&P SmallCap 600 and assumes reinvestments of dividends, if any.
We define Gogo Biz aircraft online as the total number of business aircraft not equipped with our AVANCE L5 or L3 system for which we provide ATG services as of the last day of each period presented. This number excludes commercial aircraft operated by Intelsat’s airline customers receiving ATG service. • Narrowband satellite aircraft online .
We define Gogo Biz aircraft online as the total number of business aircraft not equipped with our AVANCE L5 or L3 system for which we provide ATG services as of the last day of each period presented. This number excludes commercial aircraft operated by Intelsat’s airline customers receiving ATG service. • GEO aircraft online .
The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock. Item 6. [Reserved] 37 Item 7.
The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock. Item 6. [Reserved] 43 Item 7.
We define average monthly connectivity service revenue per ATG aircraft online as the aggregate ATG connectivity service revenue for the period divided by the number of months in the period, divided by the number of ATG aircraft online during the period (expressed as an average of the month end figures for each month in such period).
We define ARPU as the aggregate ATG connectivity service revenue for the period divided by the number of months in the period, divided by the number of ATG aircraft online during the period (expressed as an average of the month end figures for each month in such period).
The following graph shows a comparison of cumulative total return for our common stock, the Nasdaq Composite Index (“NASDAQ Composite”) and Standard & Poor’s SmallCap 600 Index (“S&P SmallCap 600”) for the period from December 31, 2018 through December 29, 2023, the last trading day of 2023.
The following graph shows a comparison of cumulative total return for our common stock, the Nasdaq Composite Index (“NASDAQ Composite”) and Standard & Poor’s SmallCap 600 Index (“S&P SmallCap 600”) for the period from December 31, 2019 through December 29, 2024, the last trading day of 2024.
The following table summarizes our purchases of common stock during the three month period ended December 31, 2023.
The following table summarizes our purchases of common stock during the three month period ended December 31, 2024.
See Note 13, “Income Tax,” to our consolidated financial statements for additional information. Recent Accounting Pronouncements See Note 1, “Summary of Significant Accounting Policies,” to our consolidated financial statements for additional information. 41 Results of Operations The following table sets forth, for the periods presented, certain data from our consolidated statements of operations.
See Note 2, “Acquisition of Satcom Direct,” to our consolidated financial statements for additional information. Recent Accounting Pronouncements See Note 1, “Summary of Significant Accounting Policies,” to our consolidated financial statements for additional information. 47 Results of Operations The following table sets forth, for the periods presented, certain data from our consolidated statements of operations.
The income tax benefit of $48.1 million for the year ended December 31, 2023 was primarily due to a partial release of the valuation allowance on our deferred income tax assets, partially offset by pre-tax income.
The income tax benefit of $48.1 million for the year ended December 31, 2023 was due to a partial release of the valuation allowance on our deferred income tax assets, partially offset by pre-tax income. See Note 15, “Income Tax,” to our consolidated financial statements for additional information.
Engineering, Design and Development Expenses: Engineering, design and development expenses include the costs incurred to design and develop our technologies and products. This includes the design, development and integration of our ATG ground networks and airborne line replaceable units, the design and development of products and enhancements thereto, and program management activities.
Engineering, Design and Development Expenses: Engineering, design and development expenses include the costs incurred to design and develop our technologies and products. This includes the design, development and integration of our ATG Broadband and satellite network technologies, the design and development of products and enhancements thereto, and program management activities.
Equipment revenue primarily consists of proceeds from the sale of ATG and narrowband satellite connectivity equipment and is recognized when control of the equipment is transferred to OEMs and dealers, which generally occurs when the equipment is shipped.
Service revenue is recognized as the services are provided to the customer. Equipment revenue primarily consists of proceeds from the sale of ATG and satellite connectivity equipment and is recognized when control of the equipment is transferred to the customer, which generally occurs when the equipment is shipped.
Period Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) October 1-31, 2023 — $ — — $ — November 1-30, 2023 80,928 $ 10.15 80,928 $ 49,180 December 1-31, 2023 398,464 $ 10.04 398,464 $ 45,187 (1) Average price paid per share includes transaction costs associated with the repurchases.
Period Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) October 1-31, 2024 368,536 $ 6.57 368,536 $ 12,083 November 1-30, 2024 — $ — — $ 12,083 December 1-31, 2024 — $ — — $ 12,083 (1) Average price paid per share includes transaction costs associated with the repurchases.
Holders of Record As of February 23, 2024, there were 32 stockholders of record of our common stock, and the closing price of our common stock was $8.50 per share as reported on the NASDAQ.
Holders of Record As of March 7, 2025, there were 32 stockholders of record of our common stock, and the closing price of our common stock was $6.88 per share as reported on the NASDAQ.
Amortization expense includes the amortization of our finite-lived intangible assets on a straight-line basis over their estimated useful lives. Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
We believe that the assumptions and estimates associated with the valuation allowance related to our deferred income tax assets have the greatest potential impact on and are the most critical to fully understanding and evaluating our reported financial results, and that they require our most difficult, subjective or complex judgments.
We believe that the assumptions and estimates associated with the fair value of service customer relationships and software acquired in the Transaction have the greatest potential impact on and are the most critical to fully understanding and evaluating our reported financial results, and that they require our most difficult, subjective or complex judgments.
Our actual results may differ materially from those contained in or implied by any forward-looking statements. Our fiscal year ends December 31 and, unless otherwise noted, references to years or fiscal are for fiscal years ended December 31. See “— Results of Operations.” Company Overview Gogo is the world’s largest provider of broadband connectivity services for the business aviation market.
Our actual results may differ materially from those contained in or implied by any forward-looking statements. Our fiscal year ends December 31 and, unless otherwise noted, references to years or fiscal are for fiscal years ended December 31.
We define satellite aircraft online as the total number of business aircraft for which we provide narrowband satellite services as of the last day of each period presented. • Average monthly connectivity service revenue per ATG aircraft online.
We define GEO aircraft online as the total number of aircraft for which we provide GEO broadband services to business aviation customers as of the last day of each period presented. This number excludes aircraft receiving services through GEO satellite networks that are end-of-life. • Average monthly connectivity service revenue per ATG aircraft online (“ARPU”).
Service revenue increased to $318.0 million for the year ended December 31, 2023, as compared with $296.3 million for the prior year, primarily due to increases in ATG aircraft online.
Gogo BA’s service revenue increased to $327.1 million for the year ended December 31, 2024, as compared with $318.0 million for the prior year, due to increases in ARPU.
Engineering, Design and Development Expenses: Engineering, design and development expenses increased to $36.7 million for the year ended December 31, 2023, as compared with $29.6 million for the prior year, primarily due to the Gogo Galileo development program and increased personnel costs.
Engineering, Design and Development Expenses Gogo BA’s engineering, design and development expenses increased 18% to $43.5 million for the year ended December 31, 2024, as compared with $36.7 million for the prior year, due to $2.6 million of personnel costs and a $2.5 million integration-related product write-off.
We expect equipment revenue to increase in the future driven by additional sales of ATG units including Gogo 5G, and Gogo Galileo units. 42 Cost of Revenue: Cost of service revenue and percent change for the years ended December 31, 2023 and 2022 were as follows (in thousands, except for percent change) : For the Years Ended December 31, % Change 2023 2022 2023 over 2022 Cost of service revenue $ 69,568 $ 64,427 8.0 % Cost of equipment revenue $ 63,383 $ 71,473 (11.3 )% Cost of service revenue increased to $69.6 million for the year ended December 31, 2023, as compared with $64.4 million for the prior year, primarily due to an increase in personnel costs and network and data center costs.
Cost of Revenue Cost of service revenue and percent change for the years ended December 31, 2024 and 2023 were as follows (in thousands, except for percent change) : For the Years Ended December 31, % Change 2024 2023 2024 over 2023 Cost of service revenue $ 74,927 $ 69,568 7.7 % Cost of equipment revenue 63,721 63,383 0.5 % Gogo BA’s cost of service revenue increased 8% to $74.9 million for the year ended December 31, 2024, as compared with $69.6 million for the prior year, due to an increase in ATG network costs.
We expect our income tax provision to increase in the long term as we continue to generate positive pre-tax income. We expect cash tax payments to be immaterial for an extended period of time, subject to the availability of our net operating loss carryforward amounts. Years Ended December 31, 2022 and 2021 “
We expect our income tax provision to increase in the long term as we continue to generate positive pre-tax income. Comparison of Years Ended December 31, 2023 and 2022 “
For the Years Ended December 31, 2023 2022 2021 Aircraft online (at period end) ATG AVANCE 3,976 3,279 2,504 Gogo Biz 3,229 3,656 3,896 Total ATG 7,205 6,935 6,400 Narrowband satellite 4,341 4,475 4,567 Average monthly connectivity service revenue per aircraft online ATG $ 3,380 $ 3,349 $ 3,238 Narrowband satellite 298 268 250 Units sold ATG 894 1,334 869 Narrowband satellite 174 206 205 Average equipment revenue per unit sold (in thousands) ATG $ 72 $ 68 $ 71 Narrowband satellite 46 49 54 • ATG AVANCE aircraft online.
For the Years Ended December 31, 2024 2023 2022 ATG aircraft online (at period end) AVANCE 4,608 3,976 3,279 Gogo Biz 2,451 3,229 3,656 Total ATG 7,059 7,205 6,935 GEO aircraft online 1,249 10 10 Average monthly connectivity service revenue per ATG aircraft online $ 3,481 $ 3,380 $ 3,349 ATG units sold 911 894 1,334 • AVANCE aircraft online.
Cost of equipment revenue decreased to $63.4 million for the year ended December 31, 2023, as compared with $71.5 million for the prior year, primarily due to a decrease in ATG units sold.
Gogo BA’s equipment revenue decreased to $77.5 million for the year ended December 31, 2024, as compared with $79.6 million for the prior year, due to a decrease in equipment repair revenue.
Revenue: We generate two types of revenue: service revenue and equipment revenue. Service revenue primarily consists of monthly subscription and usage fees paid by aircraft owners and operators for telecommunication, data, and in-flight entertainment services. Service revenue is recognized as the services are provided to the customer.
Revenue: We generate two types of revenue: service revenue and equipment revenue. The Company has three main connectivity solutions, each with its own equipment solution: Satellite Broadband, ATG Broadband and Narrowband. Service revenue primarily consists of subscription and usage fees paid by aircraft owners and operators for telecommunication, data, and in-flight entertainment services.
General and Administrative Expenses: General and administrative expenses include personnel and related operating costs of the business support functions, including finance and accounting, legal, human resources, administrative, information technology, facilities and executive groups. 40 Depreciation and Amortization: Depreciation expense includes expense associated with the depreciation of our network equipment, office equipment and furniture, fixtures and leasehold improvements, which is recorded over their estimated useful lives.
General and Administrative Expenses: General and administrative expenses include personnel and related operating costs of the business support functions, including finance and accounting, legal, human resources, administrative, information technology and cybersecurity, facilities and executive groups.
Sales and Marketing Expenses: Sales and marketing expenses increased to $29.8 million for the year ended December 31, 2023, as compared with $25.5 million for the prior year, primarily due to increased personnel costs. We expect sales and marketing expenses as a percentage of service revenue to remain relatively flat in the future.
Sales and Marketing Expenses Gogo BA’s sales and marketing expenses increased 21% to $36.1 million for the year ended December 31, 2024, as compared with $29.8 million for the prior year, due to a $4.2 million increase in personnel costs, including $1.3 million of severance.
Factors and Trends Affecting Our Results of Operations We believe that our operating and business performance is driven by various factors that affect the business aviation industry, including trends affecting the travel industry and trends affecting the customer bases that we target, as well as factors that affect wireless Internet service providers and general macroeconomic factors.
This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” discusses the results of both segments for the periods in which they are covered by the consolidated financial statements, except that, for the reasons described below, it does not reflect the impact of the Satcom Direct segment in “Key Business Metrics” and “Results of Operations—Comparison of Years Ended December 31, 2024 and 2023.” Factors and Trends Affecting Our Results of Operations We believe that our operating and business performance is driven by various factors that affect the business aviation industry, including trends affecting the travel industry and trends affecting the customer bases that we target, as well as factors that affect wireless Internet service providers and general macroeconomic factors.
We expect that our depreciation and amortization expense will increase in the future as we launch our Gogo 5G network. 43 Other (Income) Expense: Other (income) expense and percent change for the years ended December 31, 2023 and 2022 were as follows (in thousands, except for percent change) : For the Years % Change Ended December 31, 2023 over 2023 2022 2022 Interest income $ (7,403 ) $ (2,386 ) 210.3 % Interest expense 33,056 38,872 (15.0 )% Loss on extinguishment of debt 2,224 — nm Other (income) expense, net (1,315 ) 123 (1169.1 )% Total $ 26,562 $ 36,609 (27.4 )% Percentage changes that are considered not meaningful are denoted with nm.
Other (Income) Expense Other (income) expense and percent change for the years ended December 31, 2024 and 2023 were as follows (in thousands, except for percent change) : For the Years % Change Ended December 31, 2024 over 2024 2023 2023 Interest income $ (8,336 ) $ (7,403 ) 12.6 % Interest expense 38,431 33,056 16.3 % Loss on extinguishment of debt — 2,224 nm Other (income) expense, net 3,042 (1,315 ) (331.3 )% Total $ 33,137 $ 26,562 24.8 % Percentage changes that are considered not meaningful are denoted with nm. 49 Total other expense increased to $33.1 million for the year ended December 31, 2024, as compared with $26.6 million for the prior year, due to interest expense, including a reduced benefit from the interest rate caps, the unrealized holding loss on the Investment in Convertible Note in the current-year period as compared with gain on sale of an equity investment in the prior-year period and an expected credit loss reserve recorded in the current year.
For a discussion of our significant accounting policies to which many of these estimates relate, see Note 1, “Summary of Significant Accounting Policies,” to our consolidated financial statements. Note that these critical accounting estimates relate solely to our continuing operations. The accounting policies related to our discontinued operations are discussed in Note 19, “Discontinued Operations,” to our consolidated financial statements.
For a discussion of our significant 46 accounting policies to which many of these estimates relate, see Note 1, “Summary of Significant Accounting Policies,” to our consolidated financial statements. Fair Value – Acquired Service Customer Relationships and Software We account for the Transaction under the acquisition method of accounting in accordance with ASC 805, Business Combinations.
Equipment revenue decreased to $79.6 million for the year ended December 31, 2023, as compared with $107.7 million for the prior year, primarily due to decreases in the number of ATG units sold, with 894 units sold during the year ended December 31, 2023 as compared with 1,334 units for the prior year.
Gogo BA’s cost of equipment revenue increased 1% to $63.7 million for the year ended December 31, 2024, as compared with $63.4 million for the prior year.
General and Administrative Expenses: General and administrative expenses decreased to $57.3 million for the year ended December 31, 2023, as compared with $58.2 million for the prior year, primarily due to decreased personnel costs tied to a reduction in bonus expense, partially offset by an increase in legal fees resulting primarily from the costs incurred in the SmartSky litigation.
General and Administrative Expenses Gogo BA’s general and administrative expenses increased 71% to $98.2 million for the year ended December 31, 2024, as compared with $57.3 million for the prior year, due to increased acquisition and integration-related costs of $26.7 million and legal expense of $13.2 million.
Depreciation and Amortization: Depreciation and amortization expense increased to $16.7 million for the year ended December 31, 2023, as compared with $12.6 million for the prior year, primarily due to accelerated depreciation expense for certain network equipment related to the FCC Reimbursement Program, partially offset by decreased amortization expense for capitalized software.
Depreciation and Amortization Gogo BA’s depreciation and amortization expense decreased 8% to $15.3 million for the year ended December 31, 2024, as compared with $16.7 million for the prior year, due to a decrease in amortization of intangible assets.
See Note 8, “Long-Term Debt and Other Liabilities,” to our consolidated financial statements for additional information. Income Taxes: The effective income tax rate for the year ended December 31, 2023 was (49.3)%, as compared with 12.9% for the prior year.
These increases were partially offset by the loss on extinguishment of debt in the prior year. Income Taxes The effective income tax rate for the year ended December 31, 2024 was 24.2%, as compared with (49.3)% for the prior year. The income tax provision was $4.4 million for the year ended December 31, 2024 due to pre-tax income.
Removed
On December 1, 2020, we completed the previously announced sale of our commercial aviation (“CA”) business to a subsidiary of Intelsat Jackson Holdings S.A. (“Intelsat”) for a purchase price of $400.0 million in cash, subject to certain adjustments (the “Transaction”).
Added
See “— Results of Operations.” Company Overview The Company’s acquisition of Satcom Direct created a combined organization which currently is the only multi-orbit, multi-band in-flight connectivity provider offering connectivity technology purpose-built for business and military/government aviation. The Transaction united two industry-leading brands, creating a product portfolio that offers best-in-class solutions for small to large aircraft and heavy jets.
Removed
As a result, all periods presented in our consolidated financial statements and other portions of this Annual Report on Form 10-K have been conformed to present the CA business as discontinued operations. There was no discontinued operations activity for the CA business after December 31, 2021.
Added
As a combined organization, the Company has a holistic approach of providing broadband connectivity services to its customers through Gogo’s air-to-ground (“ATG”) technology and multiple satellite constellations aiming to deliver consistent, global tip-to-tail connectivity with a suite of software, hardware, and advanced infrastructure supported by a 24/7/365 in-person customer support team.
Removed
We have served this market for more than 25 years. Our mission is to enrich the lives of passengers and the efficiency of operators with the world’s best business aviation in-flight connectivity and customer support.
Added
Segments As a result of the Company’s acquisition of Satcom Direct, as described in Note 2, “Acquisition of Satcom Direct,” the Company has two reportable segments as of December 31, 2024: (i) the legacy pre-acquisition operations of the Company (“Gogo BA”) and (ii) the acquired entity, Satcom Direct.
Removed
We have always sought to provide the best connectivity for the business aviation market regardless of technology, and we have a successful history of doing so. Until recently, we focused primarily on business aviation aircraft in North America, which comprise approximately 63% of the worldwide business aviation fleet, and we are the leading provider of in-flight connectivity in that market.
Added
The consolidated financial statements and the related notes contained elsewhere in this Annual Report on Form 10-K report the results of the Gogo BA segment and, from December 3, 2024 until December 31, 2024 (the period after the Closing of the Satcom Direct acquisition), the Satcom Direct segment.
Removed
Gogo started in analogue air-to-ground (“ATG”) technology in the late 1990s, then, as analogue cellular backhaul disappeared, migrated to narrowband satellite connectivity in the early 2000s, then back to ATG with our digital broadband 3G and 4G networks beginning in 2010. We expect to commercially launch our fourth ATG network – Gogo 5G – in the fourth quarter of 2024.
Added
The Gogo BA segment provides in-flight connectivity for business aviation via air-to-ground and satellite networks. The Satcom Direct segment primarily provides global satellite-based communication solutions for business, military and government aircraft. Satcom Direct is managed as a separate reportable segment, but in the future, we may realign our reportable segments after integrating the Satcom Direct business.
Removed
We also continue to provide narrowband satellite services to customers in North America and internationally through distribution agreements with satellite providers.
Added
The metrics below are only for the Gogo BA segment and do not include metrics for the Satcom Direct segment for the period in which it is reflected in the Company’s consolidated financial statements (namely, from the Closing on December 3, 2024 until December 31, 2024), with the exception of the GEO aircraft online (which includes the Satcom Direct business aviation broadband GEO aircraft online but excludes military/government GEO aircraft online), because this reporting period provided insufficient time for management to review, test and select meaningful metrics that would be useful on a standalone basis to both management and investors.
Removed
In May 2022, in order to further serve our existing customers and expand our target market, we announced plans to expand our broadband offerings beyond ATG by launching the first global broadband service designed for all models of business aircraft (“Gogo Galileo”).
Added
Additionally, these metrics are slightly broader in scope than those previously presented for the Gogo BA segment, due to an ongoing transition after the acquisition of Satcom Direct in management’s view of which financial and operating metrics of the Gogo BA business are most important to the combined Company.
Removed
The service will use an electronically steered antenna (“ESA”), specifically designed to address a broad range of business aviation aircraft, operating on a low earth orbit (“LEO”) satellite network and is targeted for commercial launch in the fourth quarter of 2024.
Added
In future periods, after management has integrated the Satcom Direct business and has sufficient information to determine meaningfully which financial and operating metrics are useful to both management and investors, management expects to present such metrics reflecting the major aspects of all of the Company’s businesses, including those in the Gogo BA segment and the Satcom Direct segment.
Removed
Our chief operating decision maker evaluates performance and business results for our operations, and makes resource and operating decisions, on a consolidated basis. As we do not have multiple segments, we do not present segment information in this Annual Report on Form 10-K.
Added
Revenue share earned from Intelsat is excluded from this calculation. • ATG units sold . We define units sold as the number of ATG units for which we recognized revenue during the period. 45 Key Components of Consolidated Statements of Operations The following briefly describes certain key components of revenue and expenses as presented in our consolidated statements of operations.
Removed
Revenue share earned from Intelsat is excluded from this calculation. • Average monthly connectivity service revenue per narrowband satellite aircraft online .
Added
Depreciation and Amortization: Depreciation expense includes expense associated with the depreciation of our network equipment, buildings, office equipment and furniture, fixtures and leasehold improvements, which is recorded over their estimated useful lives. Amortization expense includes the amortization of our finite-lived intangible assets on a straight-line basis over their estimated useful lives.
Removed
We define average monthly connectivity service revenue per narrowband satellite aircraft online as the aggregate narrowband satellite connectivity service revenue for the period divided by the number of months in the period, divided by the number of narrowband 39 satellite aircraft online during the period (expressed as an average of the month end figures for each month in such period). • Units sold .
Added
Accordingly, we allocate the purchase price to the identifiable assets and liabilities based on their respective fair value, including acquired service customer relationships and software (the “acquired intangible assets”). Service customer relationships were valued at $144.6 million using the multi-period excess earning method.
Removed
We define units sold as the number of ATG or narrowband satellite units for which we recognized revenue during the period. • Average equipment revenue per ATG unit sold.
Added
This method of valuation reflects the present value of the projected cash flows that are expected to be generated by these existing customers less charges representing the contribution of other assets to those cash flows.
Removed
We define average equipment revenue per ATG unit sold as the aggregate equipment revenue from all ATG units sold during the period, divided by the number of ATG units sold. • Average equipment revenue per narrowband satellite unit sold .
Added
Software was valued at $55.2 million using the relief from royalty method, which is equal to the present value of the after-tax royalty savings attributable to owning the software as opposed to paying a third party for its use. We make significant estimates and assumptions to determine the fair value of the acquired intangible assets.
Removed
We define average equipment revenue per narrowband satellite unit sold as the aggregate equipment revenue earned from all narrowband satellite units sold during the period, divided by the number of narrowband satellite units sold.
Added
Critical estimates in valuing the acquired intangible assets include, but are not limited to, future projected revenue and discount rates applied to future cash flows. The Company engaged third-party valuation advisors to assist in estimating the fair value of identifiable assets and liabilities, including the selection of valuation methodologies.
Removed
Key Components of Consolidated Statements of Operations As a result of the Transaction, all periods presented in this Annual Report on Form 10-K have been conformed to present the CA business as a discontinued operation. We report the financial results of discontinued operations separately from continuing operations to distinguish the financial impact of disposal transactions from ongoing operations.
Added
Our estimates are based on assumptions the Company believes to be reasonable and are inherently uncertain. Any material changes in these assumptions could result in significant fluctuations in the fair value of acquired service customer relationships and software, potentially affecting amortization expense and future impairment assessments. Such adverse impacts may be material.
Removed
The results of operations and cash flows of a discontinued operation are restated for all comparative periods presented. Refer to Note 19, “Discontinued Operations,” to our consolidated financial statements for further information. The following briefly describes certain key components of revenue and expenses as presented in our consolidated statements of operations.
Added
The acquisition of Satcom Direct was completed on December 3, 2024 and is reflected in the combined Company’s consolidated financial statements only for the 29-day period from the Closing until December 31, 2024. As a result, there is no meaningful prior period comparison point.
Removed
Deferred Income Taxes - Valuation Allowance: We account for the valuation allowance on our deferred income tax assets in accordance with Accounting Standards Codification Topic 740, Income Taxes (“ASC 740”).
Added
Unless otherwise noted below, we expect consolidated revenue and expenses to increase in 2025 as a result of a full year of activity for Satcom Direct.
Removed
On a recurring basis, we assess the need for a valuation allowance related to our deferred income tax assets, which includes consideration of both positive and negative evidence to determine, based on the weight of the available evidence, whether it is more likely than not that some or all of our deferred tax assets will not be realized.
Added
Revenue Revenue and percent change for the years ended December 31, 2024 and 2023 were as follows (in thousands, except for percent change) : For the Years Ended December 31, % Change 2024 2023 2024 over 2023 Service revenue $ 327,056 $ 318,015 2.8 % Equipment revenue 77,450 79,562 (2.7 )% Total revenue $ 404,506 $ 397,577 1.7 % 48 Total Gogo BA revenue increased to $404.5 million for the year ended December 31, 2024, as compared with $397.6 million for the prior year, due to an increase in service revenue, partially offset by a decrease in equipment revenue.
Removed
In our assessment, we consider recent financial operating results, the scheduled expiration of our net operating losses, potential sources of future taxable income, the reversal of existing taxable differences, taxable income in prior carryback years, if permitted under tax law, and tax planning strategies.
Removed
Our determination that we are more likely than not to realize a portion of our deferred tax assets represents our best estimate and considers both positive and negative factors. This estimate involves significant management judgment and is inherently subjective.
Removed
We considered positive factors including our recent history of pre-tax income, the sale of our CA business, the reduction in interest expense resulting from the Refinancing (as defined herein) and the settlement of the 6% Convertible Senior Notes due 2022 (the “2022 Convertible Notes”) and our projected future taxable income.
Removed
The negative factors included no carryback potential due to historical pre-tax losses, not enough current taxable temporary differences to utilize the existing deferred tax assets and no available significant, prudent and feasible tax planning strategies.
Removed
It is possible that there will be changes in our business, our performance, our industry or otherwise that cause actual results to differ materially from this estimate.
Removed
If those changes result in significant and sustained reductions in our pre-tax income or utilization of existing tax carryforwards in future periods, additional valuation allowances may have to be recorded with corresponding adverse impacts on earnings and/or other comprehensive income. Such adverse impacts may be material.
Removed
For the year ended December 31, 2023, our determination that we are more likely than not to realize a portion of our deferred tax assets resulted in a release of approximately $72.8 million of our valuation allowance.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

59 edited+21 added−20 removed20 unchanged
Biggest changeManagement believes that Free Cash Flow is useful for investors because it provides them with an important perspective on the cash available for strategic measures, after making necessary capital investments in property and equipment to support the Company’s ongoing business operations and provides them with the same measures that management uses as the basis of making capital allocation decisions. 45 Gogo Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (in thousands, unaudited) For the Years Ended December 31, 2023 2022 2021 Adjusted EBITDA: Net income attributable to common stock (GAAP) $ 145,678 $ 92,059 $ 152,735 Interest expense 33,056 38,872 67,472 Interest income (7,403 ) (2,386 ) (191 ) Income tax provision (benefit) (48,075 ) 13,658 (187,230 ) Depreciation and amortization 16,701 12,580 15,482 EBITDA 139,957 154,783 48,268 Stock-based compensation expense 21,288 19,065 13,345 Loss on extinguishment of debt and settlement of convertible notes 2,224 — 83,961 Gain on sale of equity investment (1,343 ) — — Loss from discontinued operations — — 3,854 Separation costs related to CA sale — — 1,550 Adjusted EBITDA $ 162,126 $ 173,848 $ 150,978 Free Cash Flow: Net cash provided by operating activities (GAAP) $ 78,970 $ 103,405 $ 66,697 Consolidated capital expenditures (24,088 ) (49,914 ) (8,660 ) Proceeds from FCC Reimbursement Program for property, equipment and intangibles 1,130 — — Proceeds from (purchase of) interest rate caps 26,675 4,292 (8,629 ) Free cash flow $ 82,687 $ 57,783 $ 49,408 Material limitations of Non-GAAP measures Although EBITDA, Adjusted EBITDA and Free Cash Flow are measurements frequently used by investors and securities analysts in their evaluations of companies, EBITDA, Adjusted EBITDA and Free Cash Flow each have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for, or more meaningful than, amounts determined in accordance with GAAP.
Biggest changeGogo Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (in thousands, unaudited) For the Years Ended December 31, 2024 2023 2022 Adjusted EBITDA: Net income attributable to common stock (GAAP) $ 13,746 $ 145,678 $ 92,059 Interest expense 38,431 33,056 38,872 Interest income (8,336 ) (7,403 ) (2,386 ) Income tax provision (benefit) 4,388 (48,075 ) 13,658 Depreciation and amortization 18,972 16,701 12,580 EBITDA 67,201 139,957 154,783 Stock-based compensation expense 20,777 21,288 19,065 Acquisition and integration-related costs (1) 53,476 — — Amortization of acquisition-related inventory step-up costs 249 — — Change in fair value of convertible note and gain on sale of equity investment 793 (1,343 ) — Loss on extinguishment of debt — 2,224 — Adjusted EBITDA $ 142,496 $ 162,126 $ 173,848 Free Cash Flow: Net cash provided by operating activities (GAAP) $ 41,421 $ 78,970 $ 103,405 Consolidated capital expenditures (27,055 ) (24,088 ) (49,914 ) Proceeds from FCC Reimbursement Program for property, equipment and intangibles 4,395 1,130 — Proceeds from interest rate caps 23,181 26,675 4,292 Free cash flow $ 41,942 $ 82,687 $ 57,783 (1) Consists of change-in-control bonuses of $29.7 million, severance and other compensation-related costs of $3.8 million, and due diligence and advisory fees of $20.0 million.
The 2021 Credit Agreement contains customary events of default, which, if any of them occurred, would permit or require the principal, premium, if any, and interest on all of the then outstanding obligations under the Facilities to be due and payable immediately and the commitments under the Revolving Facility to be terminated.
The 2021 Credit Agreement contains customary events of default, which, if any of them occurred, would permit or require the principal, premium, if any, and interest on all of the then outstanding obligations under the 2021 Facilities to be due and payable immediately and the commitments under the Revolving Facility to be terminated.
The principal contributors to the decrease in operating cash flows were: • A $1.9 million decrease in net income and non-cash charges and credits, as noted above under “—Results of Operations.” • A $22.5 million decrease in cash flows related to operating assets and liabilities resulting from: o A decrease in cash flows primarily due to the following: ▪ Changes in prepaid expenses and other current assets primarily due to an interest rate caps receivable and receivables related to the FCC Reimbursement Program; and ▪ Changes in accrued interest due to the change in timing of payments. o Partially offset by an increase in cash flows primarily due to changes in accounts receivable due to the timing of collections.
The principal contributors to the decrease in operating cash flows were: • A $1.9 million decrease in net income and non-cash charges and credits, as noted above under “—Results of Operations.” • An $22.5 million decrease in cash flows related to operating assets and liabilities resulting from: o A decrease in cash flows due to the following: ▪ Changes in prepaid expenses and other current assets due to interest rate caps receivable and receivables related to the FCC Reimbursement Program; and ▪ Changes in accrued interest due to the change in timing of payments. o Partially offset by an increase in cash flows due to changes in accounts receivable due to the timing of collections.
On December 11, 2019, we entered into an amendment to one of the Forward Transactions (the “Amended and Restated Forward Transaction”) to extend the expected settlement date with respect to approximately 2.1 million shares of common stock held 52 by one of the Forward Counterparties, JPMorgan Chase Bank, National Association (the “2022 Forward Counterparty”), to correspond with the May 15, 2022 maturity date for the 2022 Convertible Notes.
On December 11, 2019, we entered into an amendment to one of the Forward Transactions (the “Amended and Restated Forward Transaction”) to extend the expected settlement date with respect to approximately 2.1 million shares of common stock held by one of the Forward Counterparties, JPMorgan Chase Bank, National Association (the “2022 Forward Counterparty”), to correspond with the May 15, 2022 maturity date for the 2022 Convertible Notes.
The proceeds of the Term Loan Facility were used, together with cash on hand, (i) to redeem in full and pay the outstanding principal amount of the 2024 Senior Secured Notes together with accrued and unpaid interest and redemption premiums and to pay fees associated with the termination of the ABL Credit Agreement (together with the redemption of the 2024 Senior Secured Notes, the “Refinancing”), and (ii) to pay the other fees and expenses incurred in connection with the Refinancing and the Facilities.
The proceeds of the 2021 Term Loan Facility were used, together with cash on hand, (i) to redeem in full and pay the outstanding principal amount of the 2024 Senior Secured Notes together with accrued and unpaid interest and redemption premiums and to pay fees associated with the termination of the ABL Credit Agreement (together with the redemption of the 2024 Senior Secured Notes, the “Refinancing”), and (ii) to pay the other fees and expenses incurred in connection with the Refinancing and the 2021 Facilities.
Our capital management activities include the assessment of 46 opportunities to raise additional capital in the public and private markets, utilizing one or more of the types of capital raising transactions through which we have historically financed our growth and cash needs, as well as other means of capital raising not previously used by us.
Our capital management activities include the assessment of opportunities to raise additional capital in the public and private markets, utilizing one or more of the types of capital raising transactions through which we have historically financed our growth and cash needs, as well as other means of capital raising not previously used by us.
While the interest rate caps are intended to limit our interest rate exposure under our variable rate indebtedness, which includes the Facilities, if our variable rate indebtedness does not decrease in 47 proportion to the periodic decreases in the notional amount hedged under the interest rate caps, then the portion of such indebtedness that will be effectively hedged against possible increases in interest rates will decrease.
While the interest rate caps are intended to limit our interest rate exposure under our variable rate indebtedness, which includes the Facilities, if our variable rate indebtedness does not decrease in proportion to the periodic decreases in the notional amount hedged under the interest rate caps, then the portion of such indebtedness that will be effectively hedged against possible increases in interest rates will decrease.
The Facilities may be prepaid at GIH’s option at any time without premium or penalty (other than customary breakage costs), subject to minimum principal payment amount requirements. On May 3, 2023, the Company prepaid $100 million of the outstanding principal amount of the Term Loan Facility.
The 2021 Facilities may be prepaid at GIH’s option at any time without premium or penalty (other than customary breakage costs), subject to minimum principal payment amount requirements. On May 3, 2023, the Company prepaid $100 million of the outstanding principal amount of the 2021 Term Loan Facility.
As detailed in Note 8, “Long-Term Debt and Other Liabilities,” on April 30, 2021, GIH entered into the 2021 Credit Agreement with Gogo, the lenders and issuing banks party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, which provides for the Term Loan Facility in an aggregate principal amount of $725.0 million, issued with a discount of 0.5%, and the Revolving Facility, which includes a letter of credit sub-facility.
As detailed in Note 9, “Long-Term Debt and Other Liabilities,” on April 30, 2021, GIH entered into the 2021 Credit Agreement with Gogo, the lenders and issuing banks party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, which provides for the 2021 Term Loan Facility in an aggregate principal amount of $725.0 million, issued with a discount of 0.5%, and the Revolving Facility, which includes a letter of credit sub-facility.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023 and incorporated by reference herein, includes a discussion of changes in our results of operations from fiscal year 2021 to fiscal year 2022.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024 and incorporated by reference herein, includes a discussion of changes in our results of operations from fiscal year 2022 to fiscal year 2023.
In addition, the strike prices periodically increase over the life of the caps. As a result, the extent to which the interest rate caps will limit our interest rate exposure will decrease in the future. For additional information on the interest rate caps, see Note 9, “Derivative Instruments and Hedging Activities,” to our consolidated financial statements.
In addition, the strike prices periodically increase over the life of the caps. As a result, the extent to which the interest rate caps will limit our interest rate exposure will decrease in the future. For additional information on the interest rate caps, see Note 10, “Derivative Instruments and Hedging Activities,” to our consolidated financial statements.
(2) As of December 31, 2023, our outstanding purchase obligations represented obligations to vendors incurred in order to meet operational requirements in the normal course of business, including the build out of Gogo 5G, Gogo Galileo, information technology, research and development, sales and marketing, general and administrative and production related activities.
(2) As of December 31, 2024, our outstanding purchase obligations represented obligations to vendors incurred in order to meet operational requirements in the normal course of business, including the build out of Gogo 5G, Gogo Galileo, information technology, research and development, sales and marketing, general and administrative and production related activities.
Cash used in investing activities from continuing operations was $70.4 million for the year ended December 31, 2022, primarily due to $49.9 million of capital expenditures noted below and $24.8 million purchase of short-term investments, partially offset by $4.3 million of proceeds from interest rate caps.
Cash used in investing activities was $70.4 million for the year ended December 31, 2022, due to $49.9 million of capital expenditures noted below and $24.8 million purchase of short-term investments, partially offset by $4.3 million of proceeds from interest rate caps.
(6) Other long-term obligations consist of estimated payments (undiscounted) for our asset retirement obligations, network transmission services and monthly payments of C$0.1 million (using the December 31, 2023 exchange rate) to the licensor of our Canadian ATG spectrum license over the estimated 25-year term of the agreement.
(6) Other long-term obligations consist of estimated payments (undiscounted) for our asset retirement obligations, network transmission services and monthly payments of C$0.1 million (using the December 31, 2024 exchange rate) to the licensor of 53 our Canadian ATG spectrum license over the estimated 25-year term of the agreement.
Net cash provided by (used in) investing activities from continuing operations: Cash provided by investing activities from continuing operations was $29.9 million for the year ended December 31, 2023, primarily due to $26.7 million of proceeds from interest rate caps, $24.8 million in net redemptions of short-term investments, $1.3 million in net proceeds from the sale of an equity investment and $1.1 million received from the FCC Reimbursement Program for capital expenditures, partially offset by $24.1 million of capital expenditures noted below.
Cash provided by investing activities was $29.9 million for the year ended December 31, 2023, due to $26.7 million of proceeds from interest rate caps, $24.8 million in net redemptions of short-term investments, $1.3 million in net proceeds from the sale of an equity investment and $1.1 million received from the FCC Reimbursement Program for capital expenditures, partially offset by $24.1 million of capital expenditures noted below.
Free Cash Flow represents net cash provided by operating activities, plus the proceeds received from the FCC Reimbursement Program and the interest rate caps, less purchases of property and equipment and the acquisition of intangible assets and cash paid to purchase our interest rate caps. We believe that Free Cash Flow provides meaningful information regarding our liquidity.
Free Cash Flow represents net cash provided by operating activities, plus the proceeds received from the FCC Reimbursement Program and the interest rate caps, less purchases of property and equipment and the acquisition of intangible assets. We believe that Free Cash Flow provides meaningful information regarding our liquidity.
Contractual Obligations and Commitments The following table summarizes our contractual obligations, comprised of our material future cash requirements and deferred revenue arrangements, as of December 31, 2023 (in thousands) .
Contractual Obligations and Commitments The following table summarizes our contractual obligations, comprised of our material future cash requirements and deferred revenue arrangements, as of December 31, 2024 (in thousands) .
See Note 15, “Commitments and Contingencies,” to our consolidated financial statements for additional information. Leases and Cell Site Contracts: We have lease agreements relating to certain facilities and equipment, which are considered operating leases. See Note 14, “Leases,” to our consolidated financial statements for additional information.
See Note 17, “Commitments and Contingencies,” to our consolidated financial statements for additional information. Leases and Cell Site Contracts: We have lease agreements relating to certain facilities and equipment, which are considered operating leases. See Note 16, “Leases,” to our consolidated financial statements for additional information.
We believe it is useful for an understanding of our operating performance to exclude the loss on extinguishment of debt and settlement of convertible notes from Adjusted EBITDA because of the infrequently occurring nature of this activity.
We believe it is useful for an understanding of our operating performance to exclude the loss on extinguishment of debt from Adjusted EBITDA because of the infrequently occurring nature of this activity.
The 2021 Credit Agreement contains covenants that limit the ability of GIH and its subsidiaries to incur additional indebtedness. Further, market conditions and/or our financial performance may limit our access to additional sources of equity or debt financing, or our ability to pursue potential strategic alternatives.
The Credit Agreements contain covenants that limit the ability of GIH and its subsidiaries to incur additional indebtedness. Further, market conditions and/or our financial performance may limit our access to additional sources of equity or debt financing, or our ability to pursue potential strategic alternatives.
We expect that our capital expenditures will decrease starting in 2026 as these programs are completed. 50 Debt Instruments Following is a discussion of the debt instruments we had in place as of December 31, 2023 as well as those we utilized during the years ended December 31, 2023, 2022 and 2021. 2021 Credit Agreement On April 30, 2021, Gogo and Gogo Intermediate Holdings LLC (“GIH”) (a wholly owned subsidiary of Gogo Inc.) entered into a credit agreement (the “Original 2021 Credit Agreement,” and, as it may be amended, supplemented or otherwise modified from time to time, the “2021 Credit Agreement”) among Gogo, GIH, the lenders and issuing banks party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, which provides for (i) a term loan credit facility (the “Term Loan Facility”) in an aggregate principal amount of $725.0 million, issued with a discount of 0.5%, and (ii) a revolving credit facility (the “Revolving Facility” and together with the Term Loan Facility, the “Facilities”) of up to $100.0 million, which includes a letter of credit sub-facility.
Debt Instruments Following is a discussion of the debt instruments we had in place as of December 31, 2024 as well as those we utilized during the years ended December 31, 2024, 2023 and 2022. 2021 Credit Agreement On April 30, 2021, Gogo and Gogo Intermediate Holdings LLC (“GIH”) (a wholly owned subsidiary of Gogo) entered into a credit agreement (the “Original 2021 Credit Agreement,” and, as it may be amended, supplemented or otherwise modified from time to time, the “2021 Credit Agreement”) among Gogo, GIH, the lenders and issuing banks party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, which provides for (i) a term loan credit facility (the “2021 Term Loan Facility”) in an aggregate principal amount of $725.0 million, issued with a discount of 0.5%, and (ii) a revolving credit facility (the “Revolving Facility” and together with the 2021 Term Loan Facility, the “2021 Facilities”) of up to $100.0 million, which includes a letter of credit sub-facility.
(3) See Note 8, “Long-Term Debt and Other Liabilities,” to our consolidated financial statements for more information. (4) Interest on the Term Loan Facility is calculated for future periods using the interest rate in effect as of December 31, 2023 and excludes the impact of our interest rate caps.
(3) See Note 9, “Long-Term Debt and Other Liabilities,” to our consolidated financial statements for more information. (4) Interest on our variable rate debt is calculated for future periods using the interest rate in effect as of December 31, 2024 and excludes the impact of our interest rate caps.
EBITDA, Adjusted EBITDA and Free Cash Flow are not recognized measurements under GAAP; when analyzing our performance with EBITDA or Adjusted EBITDA or liquidity with Free Cash Flow, as applicable, investors should (i) evaluate each adjustment in our reconciliation to the corresponding GAAP measure, and the explanatory footnotes regarding those adjustments, (ii) use EBITDA or Adjusted EBITDA in addition to, and not as an alternative to, net income attributable to common stock as a measure of operating results and (iii) use Free Cash Flow in addition to, and not as an alternative to, consolidated net cash provided by operating activities when evaluating our liquidity. 44 Definition and Reconciliation of Non-GAAP Measures EBITDA represents net income attributable to common stock before interest expense, interest income, income taxes and depreciation and amortization expense.
EBITDA, Adjusted EBITDA and Free Cash Flow are not recognized measurements under GAAP; when analyzing our performance with EBITDA or Adjusted EBITDA or liquidity with Free Cash Flow, as applicable, investors should (i) evaluate each adjustment in our reconciliation to the corresponding GAAP measure, and the explanatory footnotes regarding those adjustments, (ii) use EBITDA or Adjusted EBITDA in addition to, and not as an alternative to, net income attributable to common stock as a measure of operating results and (iii) use Free Cash Flow in addition to, and not as an alternative to, consolidated net cash provided by operating activities when evaluating our liquidity.
Net cash used in financing activities from continuing operations: Cash used in financing activities from continuing operations for the year ended December 31, 2023 was $120.4 million, primarily due to principal payments on the Term Loan Facility, stock-based compensation activities and share repurchases.
Cash used in financing activities for the year ended December 31, 2023 was $120.4 million, due to principal payments on the 2021 Term Loan Facility, stock-based compensation activities and share repurchases.
We believe it is useful for an understanding of our operating performance to exclude the gain on sale of equity investment from Adjusted EBITDA because this activity is not related to our operating performance.
We believe it is useful for an understanding of our operating performance to exclude the change in fair value of convertible note and gain on sale of equity investment from Adjusted EBITDA because this activity is not related to our operating performance.
Based on our current plans, we expect our cash and cash equivalents, cash flows provided by operating activities and access to capital markets will be sufficient to meet the cash requirements of our business, including capital expenditure requirements, debt maturities and share repurchases, if any, for at least the next twelve months and thereafter for the foreseeable future.
Based on our current plans, we expect our cash and cash equivalents, cash flows provided by operating activities and access to the Revolving Facility and capital markets will be sufficient to meet the cash requirements of our business, including the acquisition and integration of Satcom Direct, capital expenditure requirements and debt maturities for at least the next twelve months and thereafter for the foreseeable future.
Forward Transactions In connection with the issuance of our 3.75% Convertible Senior Notes due 2020 (“the 2020 Convertible Notes”), we paid approximately $140.0 million to enter into prepaid forward stock repurchase transactions (the “Forward Transactions”) with certain financial institutions (the “Forward Counterparties”), pursuant to which we purchased approximately 7.2 million shares of common stock for settlement on or around the March 1, 2020 maturity date for the 2020 Convertible Notes, subject to the ability of each Forward Counterparty to elect to settle all or a portion of its Forward Transactions early.
In May 2022, the remaining $102.8 million aggregate principal amount of 2022 Convertible Notes was converted by holders into 17,131,332 shares of common stock. 57 Forward Transactions In connection with the issuance of our 3.75% Convertible Senior Notes due 2020 (“the 2020 Convertible Notes”), we paid approximately $140.0 million to enter into prepaid forward stock repurchase transactions (the “Forward Transactions”) with certain financial institutions (the “Forward Counterparties”), pursuant to which we purchased approximately 7.2 million shares of common stock for settlement on or around the March 1, 2020 maturity date for the 2020 Convertible Notes, subject to the ability of each Forward Counterparty to elect to settle all or a portion of its Forward Transactions early.
Capital Expenditures Our business requires significant capital expenditures, primarily for technology development, equipment and capacity expansion. Capital spending for continuing operations for the periods presented in this report is associated with the expansion of our ATG network and data centers. We capitalized software development costs related to network technology solutions and new product/service offerings.
Capital spending for the periods presented in this report is associated with the expansion of our ATG network and data centers. We capitalized software development costs related to network technology solutions and new product/service offerings.
The Term Loan Facility amortizes in nominal quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity of the Term Loan Facility on April 30, 2028. There are no amortization payments under the Revolving Facility, and all borrowings under the Revolving Facility mature on April 30, 2026.
The 2021 Term Loan Facility amortizes in nominal quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity of the 2021 Term Loan Facility. There are no amortization payments under the Revolving Facility.
Net cash provided by operating activities from continuing operations: The following table presents a summary of our cash flows from operating activities from continuing operations for the periods set forth below (in thousands) : For the Years Ended December 31, 2023 2022 2021 Net income $ 145,678 $ 92,059 $ 156,589 Non-cash charges and credits (4,410 ) 51,110 (69,027 ) Changes in operating assets and liabilities (62,298 ) (39,764 ) (20,865 ) Net cash provided by operating activities from continuing operations $ 78,970 $ 103,405 $ 66,697 For the year ended December 31, 2023, cash provided by operating activities from continuing operations was $79.0 million, as compared with $103.4 million for the prior year.
Net cash provided by operating activities: The following table presents a summary of our cash flows from operating activities from operations for the periods set forth below (in thousands) : For the Years Ended December 31, 2024 2023 2022 Net income $ 13,746 $ 145,678 $ 92,059 Non-cash charges and credits 56,179 (4,410 ) 51,110 Changes in operating assets and liabilities (28,504 ) (62,298 ) (39,764 ) Net cash provided by operating activities $ 41,421 $ 78,970 $ 103,405 For the year ended December 31, 2024, cash provided by operating activities was $41.4 million, as compared with $79.0 million for the prior year.
The Term Loan Facility bears annual interest at a floating rate measured by reference to, at GIH’s option, either (i) an adjusted term SOFR rate (subject to a floor of 0.75%) plus an applicable margin of 3.75% and a credit spread adjustment recommended by the Alternative Reference Rates Committee of 0.11%, 0.26% or 0.43% per annum based on 1-month, 3-month or 6-month term SOFR, respectively or (ii) an alternate base rate plus an applicable margin of 2.75%.
The 2021 Term Loan Facility bears annual interest at a floating rate measured by reference to, at GIH’s option, either (i) an adjusted term secured overnight financing rate as administered by the Federal Reserve Bank of New York (“SOFR”) (subject to a floor of 0.75%) plus an applicable margin of 3.75% and a credit spread adjustment of approximately 0.11%, 0.26% or 0.43% per annum based on 1-month, 3-month or 6-month term SOFR, respectively or (ii) an alternate base rate plus an applicable margin of 2.75%.
For additional information on the 2021 Credit Agreement, the 2022 Convertible Notes, the 2024 Senior Secured Notes, the ABL Credit Facility and the 2020 Convertible Notes, see Note 8, “Long-Term Debt and Other Liabilities,” to our consolidated financial statements.
For additional information on the 2021 Credit Agreement, HPS Credit Agreement and the 2022 Convertible Notes, see Note 9, “Long-Term Debt and Other Liabilities,” to our consolidated financial statements.
The Term Loan Facility is subject to mandatory prepayment of the proceeds of certain non-permitted asset sales, insurance recoveries and condemnation events in an amount equal to: (i) 100% of the net cash proceeds of such certain non-permitted asset sales, insurance recoveries and condemnation events, subject to reduction to 50% and 0% if specified senior secured first lien net leverage ratio targets are met; (ii) 100% of the net cash proceeds of certain debt offerings; and (iii) 50% of annual excess cash flow (as defined in the 2021 Credit Agreement), subject to reduction to 25% and 0% if specified senior secured first lien net leverage ratio targets are met.
Subject to certain exceptions and de minimis thresholds, the HPS Term Loan Facility is subject to mandatory prepayments in an amount equal to: (i) 100% of the net cash proceeds of certain asset sales, insurance recovery and condemnation events; (ii) 100% of the net cash proceeds of certain debt offerings; and (iii) 75% of annual excess cash flow (as defined in the HPS Credit Agreement) commencing in 2026, subject to reduction to 50% if specified senior secured first lien net leverage ratio targets are met.
Additionally, unused commitments under the Revolving Facility are subject to a fee ranging from 0.25% to 0.50% per annum depending on GIH’s senior secured first lien net leverage ratio. As of December 31, 2023, the fee for the unused commitments under the Revolving Facility was 0.25% and the applicable margin was 3.25%.
Additionally, unused commitments under the Revolving Facility are subject to a fee ranging from 0.25% to 0.50% per annum depending on GIH’s senior secured first lien net leverage ratio.
Loans outstanding under the Revolving Facility bear annual interest at a floating rate measured by reference to, at GIH’s option, either (i) an adjusted term SOFR rate (subject to a floor of 0.00%) plus an applicable margin ranging from 3.25% to 3.75% per annum depending on GIH’s senior secured first lien net leverage ratio and a credit spread adjustment recommended by the Alternative Reference Rates Committee of 0.11%, 0.26% or 0.43% per annum based on 1-month, 3-month or 6-month term SOFR, respectively or (ii) an alternate base rate plus an applicable margin ranging from 2.25% to 2.75% per annum depending on GIH’s senior secured first lien net leverage ratio.
Loans outstanding under the Revolving Facility bear annual interest at a floating rate measured by reference to, at GIH’s option, either (i) an adjusted term SOFR rate (subject to a floor of 0.00%) plus an applicable margin ranging from 3.50% to 4.00% per annum depending on GIH’s senior secured first lien net leverage ratio or (ii) an alternate base rate plus an applicable margin ranging from 2.50% to 3.00% per annum depending on GIH’s senior secured first lien net leverage ratio.
As a result, we wrote off $2.2 million of the deferred financing costs and unaccreted debt discount, which are included in Loss on extinguishment of debt and settlement of convertible notes in our Consolidated Statements of Operations for the year ended December 31, 2023.
As a result, we wrote off $2.2 million of the deferred financing costs and unaccreted debt discount, which are included in Loss on extinguishment of debt in our Consolidated Statements of Operations for the year ended December 31, 2023. This prepayment satisfied the required amortization payments for the remaining term of the 2021 Term Loan Facility.
Cash used in financing activities from continuing operations for the year ended December 31, 2022 was $28.4 million, primarily due to the repurchase of 1.5 million shares of common stock in a private transaction and principal repayments on the Term Loan Facility.
Cash used in financing activities for the year ended December 31, 2022 was $28.4 million, due to the repurchase of 1.5 million shares of common stock in a private transaction and principal repayments on the 2021 Term Loan Facility. Capital Expenditures Our business requires significant capital expenditures, primarily for technology development, equipment and capacity expansion.
We do not expect to incur debt to fund the share repurchase program. During the year ended December 31, 2023, we repurchased an aggregate 0.5 million shares of our common stock for $4.8 million.
We do not expect to incur debt to fund the share repurchase program. During the years ended December 31, 2024 and 2023, we repurchased an aggregate 4.0 million shares and 0.5 million shares, respectively, of our common stock for $33.2 million and $4.8 million, respectively. As of December 31, 2024, approximately $12.1 million remains available under the share repurchase program.
For the year ended December 31, 2022, cash provided by operating activities from continuing operations was $103.4 million, as compared with $66.7 million for the prior year.
For the year ended December 31, 2023, cash provided by operating activities was $79.0 million, as compared with $103.4 million for the prior year.
While we believe that investors should have information about any dilutive effect of outstanding options and the cost of that compensation, we also believe that stockholders should have the ability to consider our performance using a non-GAAP financial measure that excludes these costs and that management uses to evaluate our business.
While we believe that investors should have information about any dilutive effect of outstanding options and the cost of that compensation, we also believe that stockholders should have the ability to consider our performance using a non-GAAP financial measure that excludes these costs and that management uses to evaluate our business. 50 Acquisition and integration-related costs include direct transaction costs, such as due diligence and advisory fees, and certain compensation and integration-related expenses as well as the amortization of acquisition-related inventory step-up costs.
The termination date of the cap agreements is July 31, 2027. The notional amounts of the interest rate caps periodically decrease over the life of the caps with the first reduction of $125.0 million having occurred on July 31, 2023. The aggregate notional amount of the interest rate caps as of December 31, 2023 is $525.0 million.
The notional amounts of the interest rate caps periodically decrease over the life of the caps with the latest reduction of $175.0 million having occurred on July 31, 2024. The aggregate notional amount of the interest rate caps as of December 31, 2024 is $350.0 million.
We expect that our capital expenditures will increase in the near term due to Gogo 5G and the build out of the LTE network related to the FCC Reimbursement Program. This increase may be partially offset by reimbursements from the FCC.
The decrease in capital expenditures in 2023 as compared to 2022 was due to the build out of the Gogo 5G network during 2022. We expect that our capital expenditures will increase in the near term due to the build out of the LTE network related to the FCC Reimbursement Program and capital expenditures related to Gogo 5G.
Restricted Cash Our restricted cash balances were $0.3 million as of both December 31, 2023 and 2022, and consisted primarily of a letter of credit issued for the benefit of the landlord of our office location in Chicago, IL.
Restricted Cash Our restricted cash balances were $0.5 million and $0.3 million, respectively, as of December 31, 2024 and 2023, and consisted of letters of credit issued for the benefit of the landlord of our office location in Chicago, IL and the tower operator for certain of our cell sites in Canada.
The Term Loan Facility amortizes in nominal quarterly installments equal to 1% of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity on April 30, 2028. There are no amortization payments under the Revolving Facility, and all borrowings under the Revolving Facility mature on April 30, 2026.
The HPS Term Loan Facility amortizes in quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity of the HPS Term Loan Facility on April 30, 2028.
We also capitalized costs related to the build-out of our office locations. Capital expenditures for continuing operations for the years ended December 31, 2023, 2022 and 2021 were $24.1 million, $49.9 million and $8.7 million, respectively.
We also capitalized costs related to the build-out of our office locations. 55 Capital expenditures for the years ended December 31, 2024, 2023 and 2022 were $27.1 million, $24.1 million and $49.9 million, respectively. The increase in capital expenditures in 2024 as compared to 2023 was due to capitalized software development costs related to Gogo Galileo.
We believe it is useful for an understanding of our operating performance to exclude the results of our discontinued operations from Adjusted EBITDA because they are not part of our ongoing operations.
We believe it is useful for an understanding of our operating performance to exclude acquisition and integration-related costs from Adjusted EBITDA because they are infrequent, are outside of the ordinary course of our operations and do not reflect our operating performance.
Some of these limitations include: • EBITDA and Adjusted EBITDA do not reflect interest income or expense; · EBITDA and Adjusted EBITDA do not reflect cash requirements for our income taxes; · EBITDA and Adjusted EBITDA do not reflect depreciation and amortization, which are significant and unavoidable operating costs given the level of capital expenditures needed to maintain our business; · Adjusted EBITDA does not reflect non-cash components of employee compensation; · Adjusted EBITDA does not reflect the gain on sale of equity investment; · Adjusted EBITDA does not reflect the results of discontinued operations; · Adjusted EBITDA for the year ended December 31, 2021 does not reflect the separation costs related to the sale of CA; · Adjusted EBITDA does not reflect the loss on extinguishment of debt and settlement of convertible notes; · Free Cash Flow does not represent the total increase or decrease in our cash balance for the period; and · since other companies in our industry or related industries may calculate these measures differently from the way we do, their usefulness as comparative measures may be limited.
Material limitations of Non-GAAP measures Although EBITDA, Adjusted EBITDA and Free Cash Flow are measurements frequently used by investors and securities analysts in their evaluations of companies, EBITDA, Adjusted EBITDA and Free Cash Flow each have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for, or more meaningful than, amounts determined in accordance with GAAP. 51 Some of these limitations include: • EBITDA and Adjusted EBITDA do not reflect interest income or expense; · EBITDA and Adjusted EBITDA do not reflect cash requirements for our income taxes; · EBITDA and Adjusted EBITDA do not reflect depreciation and amortization, which are significant and unavoidable operating costs given the level of capital expenditures needed to maintain our business; · Adjusted EBITDA does not reflect non-cash components of employee compensation; · Adjusted EBITDA does not reflect acquisition and integration-related costs; · Adjusted EBITDA does not reflect amortization of acquisition-related inventory step-up costs; · Adjusted EBITDA does not reflect the change in fair value of convertible note and gain on sale of equity investment; · Adjusted EBITDA does not reflect the loss on extinguishment of debt; · Free Cash Flow does not represent the total increase or decrease in our cash balance for the period; and · since other companies in industries related to ours may calculate these measures differently from the way we do, their usefulness as comparative measures may be limited.
The maximum potential amount of future payments we could be required to make under these indemnification agreements is uncertain and is typically not limited by the terms of the agreements. 48 Cash Flows The following table presents a summary of our cash flow activity for the periods set forth below (in thousands) : For the Years Ended December 31, 2023 2022 2021 Cash flows from continuing operations: Net cash provided by operating activities $ 78,970 $ 103,405 $ 66,697 Net cash provided by (used in) investing activities 29,856 (70,418 ) (16,289 ) Net cash used in financing activities (120,434 ) (28,388 ) (331,037 ) Net cash used in discontinued operations — — (9,013 ) Effect of foreign exchange rate changes on cash 94 13 40 Increase (decrease) in cash, cash equivalents and restricted cash (11,514 ) 4,612 (289,602 ) Cash, cash equivalents and restricted cash at beginning of period 150,880 146,268 435,870 Cash, cash equivalents and restricted cash at end of period $ 139,366 $ 150,880 $ 146,268 Supplemental information: Cash, cash equivalents and restricted cash at end of period $ 139,366 $ 150,880 $ 146,268 Less: current restricted cash — — 25 Less: non-current restricted cash 330 330 330 Cash and cash equivalents at end of period $ 139,036 $ 150,550 $ 145,913 Following is a discussion of the year-over-year changes in cash flow activities.
Cash Flows The following table presents a summary of our consolidated cash flow activity, including the Satcom Direct segment, for the periods set forth below (in thousands) : For the Years Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 41,421 $ 78,970 $ 103,405 Net cash provided by (used in) investing activities (337,203 ) 29,856 (70,418 ) Net cash provided by (used in) financing activities 198,691 (120,434 ) (28,388 ) Effect of foreign exchange rate changes on cash 29 94 13 Increase (decrease) in cash, cash equivalents and restricted cash (97,062 ) (11,514 ) 4,612 Cash, cash equivalents and restricted cash at beginning of period 139,366 150,880 146,268 Cash, cash equivalents and restricted cash at end of period $ 42,304 $ 139,366 $ 150,880 Supplemental information: Cash, cash equivalents and restricted cash at end of period $ 42,304 $ 139,366 $ 150,880 Less: current restricted cash 70 — — Less: non-current restricted cash 469 330 330 Cash and cash equivalents at end of period $ 41,765 $ 139,036 $ 150,550 Following is a discussion of the year-over-year changes in cash flow activities.
Adjusted EBITDA represents EBITDA adjusted for (i) stock-based compensation expense included in the results of continuing operations, (ii) loss on extinguishment of debt and settlement of convertible notes, (iii) gain on sale of equity investment, (iv) the results of discontinued operations, including stock-based compensation expense and the gain on the sale of CA and (v) separation costs related to the sale of CA.
Adjusted EBITDA represents EBITDA adjusted for (i) stock-based compensation expense, (ii) acquisition and integration-related costs, (iii) change in fair value of convertible note and gain on sale of equity investment and (iv) loss on extinguishment of debt.
The principal contributors to the increase in operating cash flows were: • A $55.6 million improvement in net income and non-cash charges and credits, as noted above under “—Results of Operations.” • An $18.9 million decrease in cash flows related to operating assets and liabilities resulting from: o A decrease in cash flows primarily due to the following: ▪ Changes in accounts receivable due to higher revenue; ▪ Changes in inventories due to additional purchases to meet increased demand and manage supply chain disruptions; and ▪ Changes in accounts payable and non-current assets and liabilities primarily due to the timing of payments. 49 o Partially offset by an increase in cash flows due to the following: ▪ Changes in accrued interest primarily due to the timing of interest payments as compared with the prior year and lower interest expense resulting from the Refinancing; and ▪ Changes in contract assets and deferred revenue due to the timing of revenue recognition and payment or collection of cash.
The principal contributors to the decrease in operating cash flows were: • A $71.3 million decrease in net income and non-cash charges and credits, as noted above under “—Results of Operations.” 54 • A $33.8 million improvement in cash flows related to operating assets and liabilities resulting from: o An increase in cash flows due to the following: ▪ Changes in prepaid expenses and other current assets related to the FCC Reimbursement Program; and ▪ Changes in accrued interest due to the change in timing of payments. o Partially offset by a decrease in cash flows due to the following: ▪ Changes in accounts payable due to the timing of payments; and ▪ Changes in contract assets due to additional promotional sales programs in the current year as compared to the prior year.
The Revolving Facility is available for working capital and general corporate purposes of GIH and its subsidiaries and was undrawn as of December 31, 2023 and 2022. 2022 Convertible Notes In 2018, we issued $237.8 million aggregate principal amount of 6.00% Convertible Senior Notes due 2022 (the “2022 Convertible Notes”) in private offerings to qualified institutional buyers, including pursuant to Rule 144A under the Securities Act, and in concurrent private placements.
The proceeds of the HPS Term Loan Facility were used to finance a portion of the cash consideration for the acquisition of Satcom Direct. 2022 Convertible Notes In 2018, we issued $237.8 million aggregate principal amount of 6.00% Convertible Senior Notes due 2022 (the “2022 Convertible Notes”) in private offerings to qualified institutional buyers, including pursuant to Rule 144A under the Securities Act, and in concurrent private placements.
These supplemental performance measures also provide another basis for comparing period-to-period results by excluding potential differences caused by non-operational and unusual or non-recurring items. These supplemental performance measures may vary from and may not be comparable to similarly titled measures used by other companies.
These supplemental performance measures may vary from and may not be comparable to similarly titled measures used by other companies.
The Revolving Facility includes a financial covenant set at a maximum senior secured first lien net leverage ratio of 7.50:1.00, which will apply if the outstanding amount of loans and unreimbursed letter of credit drawings thereunder at the end of any fiscal quarter exceeds 35% of the aggregate of all commitments thereunder.
Subject to certain exceptions and de minimis thresholds, the 2021 Term Loan Facility is subject to mandatory prepayments in an amount equal to: (i) 100% of the net cash proceeds of certain asset sales, insurance recovery and condemnation events, subject to reduction to 50% and 0% if specified senior secured first lien net leverage ratio targets are met; (ii) 100% of the net cash proceeds of certain debt offerings; and (iii) 50% of annual excess cash flow (as defined in the 2021 Credit Agreement), subject to reduction to 25% and 0% if specified senior secured first lien net leverage ratio targets are met. 56 The Revolving Facility includes a financial covenant set at a maximum senior secured first lien net leverage ratio of 7.50:1.00, which will apply if the outstanding amount of loans and unreimbursed letter of credit drawings thereunder at the end of any fiscal quarter exceeds 35% of the aggregate of all commitments thereunder.
The Revolving Facility is available for working capital and general corporate purposes of GIH and its subsidiaries and was undrawn as of December 31, 2023. In May 2022, the remaining $102.8 million aggregate principal amount of the 2022 Convertible Notes was converted by holders into 17,131,332 shares of common stock.
The Revolving Facility is available for working capital and general corporate purposes of GIH and its subsidiaries and was undrawn as of December 31, 2024 and 2023.
The 2021 Credit Agreement contains customary events of default, which, if any of them occurred (subject to certain cure rights and periods), would permit the acceleration of all of the then outstanding obligations under the Facilities (including principal amounts, premiums (if any) and interest) and cancellation of the commitments thereunder.
The HPS Credit Agreement contains customary events of default, which, if any of them occurred, would permit or require the principal, premium, if any, and interest on all of the then outstanding obligations under the HPS Term Loan Facility to be due and payable immediately.
Cash used in investing activities from continuing operations was $16.3 million for the year ended December 31, 2021, primarily due to $8.7 million of capital expenditures noted below and $8.6 million purchase of interest rate caps, partially offset by $1.0 million of proceeds from sale of property and equipment.
Net cash (used in) provided by investing activities: Cash used in investing activities was $337.2 million for the year ended December 31, 2024, due to $332.7 million of cash consideration for the acquisition of Satcom Direct as well as $27.1 million of capital expenditures noted below and a $5.0 million convertible note investment, partially offset by $23.2 million of proceeds from interest rate caps and $4.4 million received from the FCC Reimbursement Program for capital expenditures.
Non-GAAP Measures In our discussion below, we discuss EBITDA, Adjusted EBITDA and Free Cash Flow, as defined below, which are non-GAAP financial measures. Management uses EBITDA, Adjusted EBITDA and Free Cash Flow for business planning purposes, including managing our business against internally projected results of operations and measuring our performance and liquidity.
Management uses EBITDA, Adjusted EBITDA and Free Cash Flow for business planning purposes, including managing our business against internally projected results of operations and measuring our performance and liquidity. These supplemental performance measures also provide another basis for comparing period-to-period results by excluding potential differences caused by non-operational and unusual or non-recurring items.
In May 2021, we purchased interest rate caps with an aggregate notional amount of $650.0 million for $8.6 million. We receive payments in the amount calculated pursuant to the caps for any period in which the daily compounded SOFR rate plus a credit spread adjustment recommended by the Alternative Reference Rates Committees of 0.26% increases beyond the applicable strike rate.
We receive payments in the amount calculated pursuant to the caps for any period in which the daily compounded secured overnight financing rate as administered by the Federal Reserve Bank of New York (“SOFR”) plus a credit spread adjustment of 0.26% increases beyond the applicable strike rate. The termination date of the cap agreements is July 31, 2027.
Cash used in financing activities from continuing operations for the year ended December 31, 2021 was $331.0 million, primarily due to the redemption of all of our outstanding 2024 Senior Secured Notes (including the make-whole premium payable under the indenture governing the 2024 Senior Secured Notes) for a redemption price totaling $1,023.1 million and the payment of $20.3 million of deferred financing fees associated with the issuance of the Facilities, offset in part by $721.4 million of gross proceeds from the Term Loan Facility.
Net cash provided by (used in) financing activities: Cash provided by financing activities for the year ended December 31, 2024 was $198.7 million, due to $245.0 million of gross proceeds from the HPS Term Loan Facility, offset in part by debt principal payments, share repurchases, payments of deferred financing fees and stock-based compensation activities.
Removed
We believe it is useful for an understanding of our operating performance to exclude separation costs related to the sale of CA from Adjusted EBITDA for the year ended December 31, 2021 because of the non-recurring nature of this activity.
Added
These include only the results of operations of the Gogo BA segment, as they precede the Company’s acquisition of Satcom Direct in 2024. Non-GAAP Measures In our discussion below, we discuss EBITDA, Adjusted EBITDA and Free Cash Flow, as defined below, which are non-GAAP financial measures.
Removed
On February 2, 2023, Gogo and GIH entered into an amendment to the Original 2021 Credit Agreement with Morgan Stanley Senior Funding, Inc., as administrative agent, which replaced all references in the Original 2021 Credit Agreement to LIBOR in respect of the applicable interest rates for the Facilities with an adjusted term SOFR rate, plus a credit spread adjustment recommended by the Alternative Reference Rates Committee.
Added
Definition and Reconciliation of Non-GAAP Measures EBITDA represents net income attributable to common stock before interest expense, interest income, income taxes and depreciation and amortization expense.
Removed
On May 3, 2023, the Company prepaid $100 million of the outstanding principal amount of the Term Loan Facility.
Added
Management believes that Free Cash Flow is useful for investors because it provides them with an important perspective on the cash available for strategic measures, after making necessary capital investments in property and equipment to support the Company’s ongoing business operations and provides them with the same measures that management uses as the basis of making capital allocation decisions.
Removed
Less than 1-3 3-5 More than Total 1 year years years 5 years Contractual Obligations: Lease obligations (1) $ 104,804 $ 15,397 $ 30,888 $ 27,063 $ 31,456 Purchase obligations (2) 436,207 117,279 162,885 146,974 9,069 Term Loan Facility (3) 606,875 7,250 14,500 585,125 — Interest and fees on the Facilities (3)(4) 240,522 56,940 111,302 72,280 — Deferred revenue arrangements (5) 1,019 1,003 16 — — Other long-term obligations (6) 59,912 12,171 20,640 1,902 25,199 Total $ 1,449,339 $ 210,040 $ 340,231 $ 833,344 $ 65,724 (1) See Note 14, “Leases,” to our consolidated financial statements for more information.
Added
The 2021 Term Loan Facility matures on April 30, 2028.
Removed
Cash paid for taxes totaled $1.0 million, $0.4 million and $0.4 million, respectively, for the years ended December 31, 2023, 2022 and 2021. We expect cash tax payments to be immaterial for an extended period of time, subject to the availability of our net operating losses.
Added
On December 3, 2024, Gogo and GIH entered into a second amendment to the 2021 Credit Agreement with Morgan Stanley Senior Funding, Inc., as administrative agent, and the lenders party thereto to, among other purposes, (a) increase the aggregate principal amount of revolving commitments available under the 2021 Credit Agreement to an aggregate amount of revolving commitments equal to $122 million and (b) extend the maturity date of the Revolving Facility to December 3, 2029 (subject to such maturity date springing to the date that is 90 days prior to the then-current maturity date of (a) the 2021 Term Loan Facility under the 2021 Credit Agreement and (b) the HPS Term Loan Facility under the HPS Credit Agreement under certain conditions). 52 The 2021 Term Loan Facility amortizes in nominal quarterly installments equal to 1% of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity of the 2021 Term Loan Facility.
Removed
Net cash used in discontinued operations: Cash used in discontinued operations for the year ended December 31, 2021 was $9.0 million, primarily due to $7.8 million used in investing activities for a payment to Intelsat in settlement of working capital adjustments relating to the Transaction and $1.2 million used in operating activities primarily to pay the employer portion of taxes related to the vesting of equity awards and the exercise of stock options.
Added
There are no amortization payments under the Revolving Facility.
Removed
The decrease in capital expenditures in 2023 as compared to 2022 was primarily due to the build out of the Gogo 5G network during 2022. The increase in capital expenditures in 2022 as compared to 2021 was primarily due to the build out of Gogo 5G.
Added
As detailed in Note 9, “Long-Term Debt and Other Liabilities,” on December 3, 2024, Gogo and GIH entered into a credit agreement (the “HPS Credit Agreement” and together with the 2021 Credit Agreement, the “Credit Agreements”) with the lenders party thereto and HPS Investment Partners, LLC, as the administrative agent, which provides for a term loan credit facility (the “HPS Term Loan Facility”) in an aggregate principal amount of $250 million.
Removed
On February 2, 2023, Gogo and GIH entered into an amendment to the Original 2021 Credit Agreement with Morgan Stanley Senior Funding, Inc., as administrative agent, which replaced all references in the Original 2021 Credit Agreement to LIBOR in respect of the applicable interest rates for the Facilities with an adjusted term secured overnight financing rate as administered by the Federal Reserve Bank of New York (“SOFR”), plus a credit spread adjustment recommended by the Alternative Reference Rates Committee.
Added
The Credit Agreements contain customary events of default, which, if any of them occurred, would permit or require the principal, premium, if any, and interest on all of the then outstanding obligations under the Facilities to be due and payable immediately and the commitments under the Revolving Facility to be terminated.
Removed
We elected to apply the optional expedient within ASC 848, Facilitation of the Effects of Reference Rate Reform on Financial Reporting , to conclude that this modification was not substantial and did not have a material impact to our consolidated financial statements.
Added
In May 2021, we purchased interest rate caps with an aggregate notional amount of $650.0 million for $8.6 million.
Removed
The 2021 Credit Agreement contains covenants that limit the ability of GIH and its subsidiaries to incur certain non-permitted indebtedness. 51 The proceeds of the Term Loan Facility were used, together with cash on hand, (i) to redeem in full and pay the outstanding principal amount of the 2024 Senior Secured Notes together with accrued and unpaid interest and redemption premiums and to pay fees associated with the termination of the ABL Credit Agreement (together with the redemption of the 2024 Senior Secured Notes, the “Refinancing”), and (ii) to pay the other fees and expenses incurred in connection with the Refinancing and the Facilities.
Added
Less than 1-3 3-5 More than Total 1 year years years 5 years Contractual Obligations: Lease obligations (1) $ 98,871 $ 17,819 $ 34,848 $ 26,781 $ 19,423 Purchase obligations (2) 602,884 189,502 249,068 164,314 — 2021 Term Loan Facility (3) 601,438 — — 601,438 — HPS Term Loan Facility (3) 249,375 2,500 5,000 241,875 — Interest and fees on the Facilities (3)(4) 260,724 78,379 155,957 26,388 — Deferred revenue arrangements (5) 41,268 30,408 10,860 — — Other long-term obligations (6) 63,313 18,679 18,125 2,072 24,437 Total $ 1,917,873 $ 337,287 $ 473,858 $ 1,062,868 $ 43,860 (1) See Note 16, “Leases,” to our consolidated financial statements for more information.
Removed
In May 2022, the remaining $102.8 million aggregate principal amount of 2022 Convertible Notes was converted by holders into 17,131,332 shares of common stock. 2024 Senior Secured Notes On April 25, 2019, GIH and Gogo Finance Co. Inc.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rate Risk: We are exposed to interest rate risk on our variable rate indebtedness, which includes borrowings under the Term Loan Facility and Revolving Facility (if any).
Biggest changeInterest Rate Risk: We are exposed to interest rate risk on our variable rate indebtedness, which includes borrowings under each of the Facilities (if any).
We believe we have minimal interest rate risk as a 10% decrease in the average interest rate on our portfolio would have reduced interest income for the years ended December 31, 2023, 2022 and 2021 by immaterial amounts. Inflation: We do not believe that inflation has had a material effect on our results of operations.
We believe we have minimal interest rate risk as a 10% decrease in the average 58 interest rate on our portfolio would have reduced interest income for the years ended December 31, 2024, 2023 and 2022 by immaterial amounts. Inflation: We do not believe that inflation has had a material effect on our results of operations.
As of December 31, 2023, we had interest rate cap agreements to hedge a portion of our exposure to interest rate movements of our variable rate debt and to manage our interest expense.
As of December 31, 2024, we had interest rate cap agreements to hedge a portion of our exposure to interest rate movements of our variable rate debt and to manage our interest expense.
However, there can be no assurance that our business will not be affected by inflation in the future. 53
However, there can be no assurance that our business will not be affected by inflation in the future. 59
Over the life of the interest rate caps, the notional amounts of the caps periodically decrease, while the applicable strike prices increase. The notional amount of outstanding debt associated with interest rate cap agreements as of December 31, 2023 was $525.0 million.
Over the life of the interest rate caps, the notional amounts of the caps periodically decrease, while the applicable strike prices increase. The notional amount of outstanding debt associated with interest rate cap agreements as of December 31, 2024 was $350.0 million.
Excluding the impact of our interest rate caps, a hypothetical one percentage point change in the applicable interest rate would impact our annual interest expense by approximately $6.1 million for the next twelve-month period.
Excluding the impact of our interest rate caps, a hypothetical one percentage point change in the applicable interest rate would impact our annual interest expense by approximately $8.5 million for the next twelve-month period.
Based on our December 31, 2023 outstanding variable rate debt balance, a hypothetical one percentage point change in the applicable interest rate would impact our annual interest expense by approximately $1.5 million for the next twelve-month period, which includes the impact of our interest rate caps at a strike rate of 0.75% and the $175 million reduction in the notional amount and an increase of the strike rate to 1.25% that will occur on July 31, 2024.
Based on our December 31, 2024 outstanding variable rate debt balance, a hypothetical one percentage point change in the applicable interest rate would impact our annual interest expense by approximately $5.4 million for the next twelve-month period, which includes the impact of our interest rate caps at a strike rate of 1.25% and the $100 million reduction in the notional amount and an increase of the strike rate to 2.25% that will occur on July 31, 2025.
Treasury securities, U.S. government agency securities, and money market funds. Our cash, cash equivalents and short-term investments as of both December 31, 2023 and December 31, 2022 primarily included amounts in bank deposit accounts, U.S. Treasury securities and money market funds with U.S. Government and U.S. Treasury securities.
Treasury securities, U.S. government agency securities, and money market funds. Our cash and cash equivalents as of both December 31, 2024 and December 31, 2023 primarily included amounts in bank deposit accounts, U.S. Treasury securities and money market funds with U.S. Government and U.S. Treasury securities.

Other GOGO 10-K year-over-year comparisons