Gogo Inc (GOGO)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 77.73% | 66.56% | 66.37% | 69.56% | 68.72% |
| Operating profit margin | 11.53% | 31.23% | 35.22% | 35.93% | 28.31% |
| Pretax margin | 4.08% | 24.55% | 26.16% | -9.13% | -18.06% |
| Net profit margin | 3.09% | 36.64% | 22.78% | 45.50% | -18.00% |
Gogo Inc's profitability ratios have shown some interesting trends over the past five years. The gross profit margin has been relatively stable, starting at 68.72% in 2020 and increasing to 69.56% in 2021 before decreasing to 66.37% in 2022 and then slightly increasing to 66.56% in 2023. However, there was a significant jump in the gross profit margin to 77.73% in 2024, indicating a potential improvement in the company's cost management or pricing strategies.
In terms of operating profit margin, Gogo Inc has experienced fluctuations. The margin increased from 28.31% in 2020 to 35.93% in 2021 and then decreased to 35.22% in 2022 and further dropped to 31.23% in 2023. The operating profit margin saw a steep decline to 11.53% in 2024, suggesting potential challenges in controlling operating expenses or generating sufficient revenue.
The pretax margin for Gogo Inc has been quite volatile over the years. Starting in negative territory at -18.06% in 2020, the company made significant progress to -9.13% in 2021, but then remarkably improved to 26.16% in 2022. The margin slightly decreased to 24.55% in 2023 and further dropped to 4.08% in 2024, indicating fluctuations in the company's ability to manage its pre-tax income relative to its revenue.
Finally, the net profit margin for Gogo Inc also exhibited substantial variability. Beginning at -18.00% in 2020, the company experienced a remarkable turnaround in 2021 with a net profit margin of 45.50%. The margin then decreased to 22.78% in 2022 but improved to 36.64% in 2023. However, there was a significant decline in the net profit margin to 3.09% in 2024, underscoring potential challenges in sustaining profitability after the previous year's high.
In conclusion, Gogo Inc's profitability ratios reflect a mixed performance over the past five years, with fluctuations in margins hinting at potential challenges in cost management, revenue generation, and overall profitability sustainability. Further analysis of the company's financial and operational strategies may be warranted to understand the underlying factors driving these trends.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.17% | 15.89% | 18.74% | 18.62% | 11.33% |
| Return on assets (ROA) | 1.12% | 18.64% | 12.12% | 23.58% | -7.21% |
| Return on total capital | 81.60% | 304.89% | — | — | — |
| Return on equity (ROE) | 19.83% | 357.71% | — | — | — |
Gogo Inc's profitability ratios indicate varying levels of performance over the years.
1. Operating Return on Assets (Operating ROA):
- The Operating ROA shows the company's ability to generate operating profits from its assets. Gogo Inc's Operating ROA has shown an improving trend from 11.33% in 2020 to 18.74% in 2022, but it decreased slightly to 15.89% in 2023 and significantly to 4.17% in 2024. The decreasing trend in 2024 might indicate challenges in effectively utilizing assets to generate operating profits.
2. Return on Assets (ROA):
- The ROA measures the company's overall ability to generate profits from its total assets. Gogo Inc's ROA was negative in 2020 but improved significantly to 23.58% in 2021 and further to 18.64% in 2023. However, there was a slight decrease to 1.12% in 2024, which might suggest challenges in efficiently utilizing assets to generate profits that year.
3. Return on Total Capital:
- The Return on Total Capital indicates how well the company is managing both debt and equity to generate returns. Gogo Inc did not have data available for this ratio until 2023 when it recorded an exceptionally high return of 304.89%. This substantial increase could suggest the company made effective use of capital investments or reduced its total capital in that year.
4. Return on Equity (ROE):
- The ROE measures the return the company generates on shareholders' equity. Gogo Inc did not have data available for ROE until 2023, where it showed an impressive ROE of 357.71%. However, the ROE decreased to 19.83% in 2024, indicating a potential decline in the profitability relative to shareholders' investment.
Overall, Gogo Inc's profitability ratios demonstrate fluctuations, indicating the company's performance in utilizing assets and managing capital to generate profits. It is crucial for stakeholders to monitor these ratios consistently to assess the company's financial health and performance accurately.