Gogo (NASDAQ: GOGO) reported Q3 EPS of ($0.11), $0.66 better than the analyst estimate of ($0.77). Revenue for the quarter came in at $66.5 million versus the consensus estimate of $111.43 million.

Third Quarter 2020 Business Aviation Financial Results: Continuing Operations

• Total revenue decreased to $66.5 million, down 18% from Q3 2019, driven by declines in both service and equipment revenue caused by the negative impact of COVID-19. However, total revenue grew 22% sequentially from Q2 2020, driven by a 21% increase in service revenue and a 25% increase in equipment revenue.
• Service revenue decreased to $53.3 million, down 4% from Q3 2019, resulting primarily from a 3% decrease in average monthly service revenue per ATG unit online. Service revenue increased 21% sequentially as ATG aircraft online (AOL) and average monthly service revenue increased 3% and 17%, respectively.
• Equipment revenue decreased to $13.2 million, down 49% from Q3 2019, primarily due to lower unit shipments. Equipment revenue increased 25% sequentially from Q2 2020 as ATG shipments increased substantially.
• Combined engineering, design and development, sales and marketing and general and administrative expenses decreased to $20.8 million, down 18% from Q3 2019, primarily due to cost management actions.
• Adjusted EBITDA decreased to $30.2 million, down 9% from Q3 2019, with Adjusted EBITDA margin of 45.4%.

Q3 2020 Commercial Aviation Financial Summary: Discontinued Operations

• Total revenue of $44 million.
• Total CA service revenue of $40.5 million declined 61% from Q3 2019 but increased 34% from Q2 2020.
• Net loss of $71.2 million, which includes $27 million of accelerated depreciation offset by $18 million of accelerated amortization of deferred lease proceeds, both related to the Delta contract amendment signed in Q2 2020, and approximately $20 million of stock-based compensation expense, inventory reserves and Transaction expenses.

"The sale of our Commercial Aviation division to Intelsat is transformational for Gogo and remains on track for closing. The Transaction will give us the ability to de-lever, generate positive free cash flow, take advantage of our substantial NOL carryforwards, and invest in strengthening our Business Aviation franchise," said Oakleigh Thorne, Gogo's President and CEO. "The rapid recovery in BA is a testament to the strength of our business."

"Our priorities are to close the Intelsat transaction, focus on BA's long-term growth opportunities and rebuild our balance sheet," said Barry Rowan, Gogo's Executive Vice President and CFO. "Looking ahead, we expect to de-lever and meaningfully lower our cost of capital through a comprehensive refinancing."

For earnings history and earnings-related data on Gogo (GOGO) click here.