Gogo Inc (GOGO)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 56,565 | 108,079 | 121,923 | 148,891 | 130,998 | 142,341 | 143,017 | 139,305 | 142,326 | 135,990 | 129,515 | 125,884 | 117,074 | 100,465 | 165,921 | 82,164 | 47,548 | 40,857 | -47,732 | 16,703 |
| Interest expense (ttm) | US$ in thousands | 52,737 | 48,494 | 46,849 | 40,681 | 35,436 | 34,237 | 36,925 | 38,628 | 39,602 | 41,067 | 40,360 | 46,113 | 63,754 | 85,051 | 104,760 | 119,325 | 121,489 | 120,425 | 120,122 | 125,379 |
| Interest coverage | 1.07 | 2.23 | 2.60 | 3.66 | 3.70 | 4.16 | 3.87 | 3.61 | 3.59 | 3.31 | 3.21 | 2.73 | 1.84 | 1.18 | 1.58 | 0.69 | 0.39 | 0.34 | -0.40 | 0.13 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $56,565K ÷ $52,737K
= 1.07
Gogo Inc's interest coverage ratio has shown fluctuating trends over the past few years from a low of -0.40 in June 30, 2020, to a high of 4.16 in September 30, 2023. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income. A ratio below 1 suggests that the company is not generating enough operating income to cover its interest expenses, indicating a higher risk of default.
For Gogo Inc, the interest coverage ratio improved significantly from negative values in 2020 to above 1 since March 31, 2021, indicating a healthier financial position. The trend continued to improve, reaching a peak of 4.16 by September 30, 2023, before slightly declining in the subsequent quarters. Overall, the increasing trend in the interest coverage ratio demonstrates a positive sign of the company's improving ability to meet its interest obligations with its operating earnings. Investors and creditors may view this positively as it signifies better financial health and lower risk of default.
Peer comparison
Dec 31, 2024