Gogo's Galileo Is Real; the Spectrum Review Is the Wildcard

Record LEO shipments and a fresh asset-review process collide with an accelerating ATG unwind — and a 4x leverage ratio keeps the clock ticking.

GOGO · Earnings Call · 2026-11-06

The quarter in one line

Gogo reported third-quarter 2026 revenue of $213 million, down 5% year over year, with service revenue of $182.7 million and equipment revenue of $30.5 million. Adjusted EBITDA fell 27% to $41 million, and the company posted a $3.2 million net loss. Yet management’s message was upbeat because Galileo, its low-earth-orbit business-aviation product, had a record quarter. The tension is the story: a legacy high-margin air-to-ground business is shrinking faster than the new LEO business is scaling, and management has now layered a strategic review of its spectrum and tower assets on top of the operating turnaround. The tape is not buying the optimism yet. Gogo’s stock is down 27.5% over the last 90 trading days and roughly 48% from its August peak, leaving a market cap near $526 million. That is a skeptical backdrop for a company whose revenue has stalled: total revenue was $223 million in the June quarter before slipping to $213 million in the September quarter. The market is pricing Gogo at a fraction of sales — price-to-revenue was 0.5x — which is either a value opportunity or a warning that the transition is not yet de-risked.

Galileo is no longer a promise

The operating highlight is unambiguous. Gogo shipped a record 172 Galileo HDX and SDX units in the quarter, up 59% sequentially and 95% year over year. Cumulative Galileo shipments reached 690 at quarter-end and have since passed 760, which management estimates gives Gogo 35% to 40% of the LEO business-aviation connectivity market less than a year after launch. Aircraft online reached 297, up 61% sequentially. The pipeline remains above 500 aircraft even after a record quarter of closed business. New commitments span the channel: Textron will offer no-charge Galileo HDX installation on factory-new Latitude and Longitude aircraft starting in 2028; PlaneSense selected Galileo for its entire 71-aircraft fleet; Duncan Aviation ordered 40 units; Bombardier ordered 25 units for demonstration and aftermarket; and TransMedics is equipping 22 aircraft for organ-transport missions. The strategic point is that LEO business relationships are 7- to 10-year recurring revenue contracts, not one-time hardware sales. Management also said promotional pricing is beginning to roll off, lifting average monthly service revenue per Galileo aircraft 6% sequentially. CFO Zachary Cotner was asked whether the shipment pace is repeatable: “we do feel like the kind of shipment number we have seen this year is repeatable” — Zachary Cotner, Chief Financial Officer (CFO) · 2026-11-06. That is a strong statement, but the margin caveat matters. Galileo hardware carries lower margins than the ATG equipment it replaces, and several fleet orders were aggressively priced to win long-duration service revenue. The bet is that service revenue and ARPU scale before the margin mix damage becomes permanent.

The ATG unwind is the offset

The legacy side is deteriorating as planned — but the plan keeps shifting. Total ATG aircraft online ended the quarter at 5.4 thousand, down 6% sequentially. ATG equipment units sold fell to 142, down 52% sequentially. Gogo 5G ended with 94 aircraft online, while Classic and Avance bases continued to erode. Management has consistently framed this as an ATG transition, not a competitive loss, and the current call offered fresh evidence: 71 of the quarter’s deactivations were upgrades to Galileo or 5G, the highest number Gogo has seen. “within those deactivation numbers, 71 are upgrades either to Galileo or 5G that is now been activated” — Zachary Cotner, Chief Financial Officer (CFO) · 2026-11-06, Cotner said. That is a meaningful data point because it suggests a portion of the ATG bleed is self-inflicted migration rather than customer defection. Still, the company would not call the bottom. CEO Christopher Moore said it is “a bit too early to give you the exact timing” — Christopher Moore, Chief Executive Officer (CEO) · 2026-11-06, and the FCC’s rip-and-replace cutover has been pushed into the first quarter of 2027. The prior calls set this expectation. In February, Cotner said “our view is between Classic, AVANCE, then also with the addition of 5G, the total ATG portfolio will be down about 1,000 units by year-end” — Zachary Cotner, Chief Financial Officer (CFO) · 2026-02-27. In May, Moore acknowledged the installation lag: “It's going to take time. We've got the building blocks in place” — Christopher Moore, CEO · 2026-05-08. The difference now is that Galileo shipments are finally converting into aircraft online, while the legacy decline is still accelerating. The market needs to see those two lines cross.

The new twist: spectrum and towers

The genuinely new item on this call was not Galileo — it was the strategic review of Gogo’s spectrum and tower assets. The FCC recently granted a 10-year renewal for Gogo’s exclusive 4 MHz of 800-megahertz ATG spectrum. Moore argued that as ATG customers migrate to satellite connectivity, “we believe our tower assets and this spectrum can be put to work in new ways whether by GoGo, or others” — Christopher Moore, Chief Executive Officer (CEO) · 2026-11-06. Gogo has engaged banking advisers and regulatory specialists to evaluate the highest and best use of those assets.

If you look at what we are doing in the UAV space, with unmanned aerial vehicles, I think there is more further opportunity in those use cases towards unmanned aircraft systems. And that has opportunity in its own right Terrestrial mobile carriers as you have seen with the recent GREANE auction and also D2D. The amazing thing with our spectrum, and it is obviously very unique, is that it actually can be applied across those 3 areas.
Christopher Moore, Chief Executive Officer (CEO) · 2026-11-06

This is a new strategic option, not a reheated talking point. Prior calls mentioned tower assets only in passing; this call put spectrum at the center of the Q&A. The logic is that nationwide, exclusive-use low-band spectrum with favorable propagation could be valuable for terrestrial mobile, direct-to-device, or unmanned-aircraft applications. Moore called it “potentially undervalued in the past” — Christopher Moore, Chief Executive Officer (CEO) · 2026-11-06. But there is no timeline, no transaction structure, and no financial framework. For now, it is optionality — not a number in the model.

Balance sheet and guidance

The balance sheet remains the constraint. Gogo completed an amendment and extension of its roughly $600 million original Term Loan B, pushing the consenting lenders’ maturity to October 2030 and committing to $75 million of principal payments by the end of 2027, including $25 million paid at closing. That supports the debt reduction priority, but leverage is still high: “our net leverage ratio at quarter end was 4x compared to 3.8x at the end of the second quarter” — Zachary Cotner, Chief Financial Officer (CFO) · 2026-11-06. The increase came from lower trailing EBITDA, not more debt. Effective net cash was negative $753 million at the June quarter-end. Free cash flow was a bright spot: $28.1 million in Q3, the highest of the year, helped by lower capex and inventory reduction. Free cash flow was $18 million in the June quarter and $28.1 million in the September quarter. Management reiterated full-year guidance of $870 million to $895 million in revenue and $175 million to $185 million in adjusted EBITDA, with litigation expense now expected at $18 million after the Delaware court vacated the $22.7 million SmartSky jury award. The litigation is not fully over — final judgment has not been entered — but the expense tail is shrinking.

What to watch

The military and government business remains a useful stabilizer. Government service revenue was $37.2 million, up 36% year over year but down 7% sequentially from a record second quarter that benefited from Middle East conflict activity. The more interesting development is the push into unmanned systems: Gogo and In Situ, a Boeing company, completed testing of a modified high-speed satellite connectivity solution for Group 3 uncrewed aircraft, and Gogo plans to fly a Group 2 or 3 aircraft on its LTE network before year-end. GEO aircraft online continued to moderate to 1.28 thousand, but a sovereign communications lease worth more than $15 million annually shows why GEO remains strategically useful. The next few quarters hinge on three observable items: Galileo activations and ARPU, the pace of ATG deactivations after the FCC cutover, and any concrete progress on the spectrum review. If Galileo can keep shipping 170-plus units per quarter and convert them into online aircraft, the revenue mix should eventually inflect. If ATG erosion outruns that conversion, the 4x leverage ratio leaves little room for error. The spectrum and tower assets are the swing factor — a potential hidden asset that could change the story, but only if management converts the review into a transaction. For now, the quarter says Gogo is winning the LEO product battle while still losing the legacy revenue war.