Moody's Investors Service has downgraded Gogo Inc.'s corporate family rating to B2 from B1, but left a stable outlook in place for the in-flight connectivity specialist.
The rating action reflects what Moody's describes as intensifying competitive pressure in Gogo's business-jet connectivity markets and rising execution risk as the company repositions itself globally to serve business and military/government customers. The agency also pointed to governance weaknesses, driven by relatively high debt leverage and limited clarity around the pace of deleveraging.
Gogo, which supplies broadband connections to the business aviation market, is shifting from its prior single-technology model to a multi-orbit, multi-band strategy. The company completed the acquisition of Satcom Direct in December 2024, adding a geostationary satellite provider with a customer base that includes business aviation and military users worldwide. In addition to that deal, Gogo rolled out new services in recent months: Gogo Galileo low-earth-orbit services in March 2025 and Gogo 5G in North America in December 2025.
Despite the strategic moves, Moody's emphasizes that Gogo remains constrained by its modest scale and narrow market focus. The ratings agency cites pro forma revenue of $890 million for the 12 months ended September 30, 2025, as a marker of that scale limitation. In early December 2025, Gogo lost a potential future business opportunity with NetJets Inc. to competition from Starlink Services, although existing contracts with NetJets remain intact.
Moody's noted that Gogo did secure work with Vista Global Holding in competition with Starlink, but characterized the NetJets outcome as a notable missed opportunity that illustrates shifting competitive dynamics in the market. The agency still sees Gogo as relatively well positioned for smaller jets in North America, citing advantages of its 5G offering - specifically lower costs and smaller antenna size - that can be attractive in that subsegment.
On leverage, Gogo's pro forma debt-to-EBITDA ratio stood at 4.4 times for the period ended September 30, 2025. Moody's attributes the elevated leverage primarily to debt raised to fund the Satcom Direct acquisition and to higher operating costs as the company invests in new technologies. The agency now projects leverage to be roughly 4.2 times at year-end 2026, reflecting a slower expected pace of deleveraging than Moody's had previously assumed.
Liquidity metrics remain solid, according to Moody's. The company had about $134 million in cash as of September 30, 2025, and an undrawn $122 million revolving credit facility that matures in December 2029. Moody's expects Gogo to produce positive free cash flow of roughly $100 million in 2026.
The stable outlook from Moody's signals an expectation that Gogo's debt-to-EBITDA will remain above 4.0 times through 2026, with improvement anticipated in 2027 as revenue and EBITDA growth contribute to deleveraging. The agency also expects Gogo to pause share repurchases and focus on reducing debt over the coming 18 months.
Context and implications
The rating action highlights a period of transition for Gogo. The company is pursuing a capital-intensive evolution of its service mix while managing customer wins and losses against large satellite competitors. Moody's commentary underscores the twin challenges of competing against entrenched or disruptive rivals and demonstrating a clear path to lower leverage.