Gogo Inc. 10-K

Item 8. Financial Statements and Supplementary Data Gogo Inc. Index to Consolidated Financial Statements Page No. Report of Deloitte & Touche LLP , Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 62 Consolidated Balance Sheets 64 Consolidated Statements of Operations 65 Consolidated Statements of Comprehensive Income 66 Consolidated Statements of Cash Flows 67 Consolidated Statements of Stockholders’ Equity 68 Notes to Consolidated Financial Statements 69 61 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Gogo Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Gogo Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with the accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2026, expressed an adverse opinion on the Company's internal control over financial reporting because of a material weakness. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Goodwill — Refer to Notes 1 and 8 to the financial statements Critical Audit Matter Description The Company performed a quantitative goodwill impairment assessment as of its annual test date of October 1, 2025, and determined that it was not more likely than not that the fair value of the reporting unit was below its carrying value as of such date. The Company’s quantitative goodwill impairment assessment involved comparing the carrying value of the Company’s reporting unit to the estimated fair value of the reporting unit which is based on both the market and income approaches to estimate fair value. The quantitative goodwill impairment assessment requires the Company to make significant estimates and assumptions related to the determination of the fair value of the reporting unit. Changes in these assumptions could have a significant impact on either the fair value of the reporting unit, the amount of any goodwill impairment charge, or both. The Company's goodwill balance is $193 million as of December 31, 2025, and the quantitative goodwill impairment assessment performed as of October 1, 2025 resulted in the fair value of the reporting unit in excess of its carrying value. Therefore, no goodwill impairment charge was recorded. We identified goodwill as a critical audit matter because of (i) the significant judgments inherent in management’s estimates while developing the fair value measurement of the reporting unit including forecasted revenue growth rates, forecasted earnings before income taxes, depreciation and amortization (“EBITDA”) margins, discount rate, long-term growth rate, and the selection of financial multiples of comparable companies; (ii) a high degree of auditor judgment and subjectivity in performing our audit procedures; and (iii) 62 an increased extent of effort involved using professionals with specialized skill and knowledge to evaluate the reasonableness of management's estimates and assumptions. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the preparation of the forecasted revenue growth rates and forecasted EBITDA margins, and the selection of the discount rate, long-term growth rate, and financial multiples of comparable companies used in the quantitative goodwill impairment assessment for the Company’s reporting unit included the following: • We tested the effectiveness of controls over the annual goodwill impairment assessment, including those over the preparation of the forecasted revenue growth rates and forecasted EBITDA margins, and the selection of the discount rate, long-term growth rate, and financial multiples of comparable companies used in the fair value measurement. • We performed sensitivity analyses of the forecasted revenue growth rates, forecasted EBITDA margins, discount rate, and long-term growth rate to evaluate the reasonableness of management’s assumptions. • We evaluated the reasonableness of the forecasted revenue growth rates and forecasted EBITDA margins by comparing the assumptions to (i) similar metrics for guideline public companies and (ii) third-party macroeconomic and industry data. • With the assistance of our fair value specialists, we evaluated the reasonableness of the selection of the discount rate, long-term growth rate, and financial multiples of comparable companies, along with the valuation methodology. Earnout Consideration — Refer to Notes 1 and 2 to the financial statements Critical Audit Matter Description On December 3, 2024, the Company completed its acquisition of Satcom Direct, LLC (“Satcom Direct”) for consideration at close of the acquisition of $448 million, which included the fair value of contingent consideration related to a potential earnout provision. During the year, the earnout consideration associated with the Satcom Direct acquisition was remeasured and subsequent changes to the fair value of the earnout consideration were recorded within the consolidated statement of operations. As of December 31, 2025, the Company determined the fair value of the earnout consideration to be $71.9 million, which represents a ‘Level 3’ fair value measurement in the fair value hierarchy due to the significant unobservable inputs used in determining the fair value and the use of management judgment for key assumptions. As of December 31, 2025, $33.0 million of the earnout consideration is included in Other non-current liabilities on the Consolidated Balance Sheets, with the remainder in Accrued liabilities. Auditing the valuation of the earnout consideration was complex and required significant auditor judgment due to the use of a Monte Carlo simulation model and the high degree of subjectivity in evaluating certain assumptions required to estimate the fair value of the earnout consideration. In particular, the fair value measurement was sensitive to the significant assumptions underlying the estimated forecasted gross profit projections of Satcom Direct and the risk-adjusted discount rate. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the forecasted gross profit projections and risk-adjusted discount rate used in the Company’s earnout consideration valuation included the following: • We tested the effectiveness of controls over the earnout consideration, including those over the preparation of forecasted gross profit projections and the selection of the risk-adjusted discount rate to estimate the fair value of the earnout consideration. • We evaluated the reasonableness of management’s forecasted gross profit projections by comparing the forecasts to third-party macroeconomic and industry data. • We evaluated whether the forecasted gross profit projection assumptions used were consistent with evidence obtained in other areas of the audit. • With the assistance of our fair value specialists, we evaluated the reasonableness of the selection of the risk-adjusted discount rate, along with the valuation methodology. /s/ Deloitte & Touche, LLP Chicago, IL February 27, 2026 We have served as the Company's auditor since 2007. 63 Gogo Inc. and Subsidiaries Consolidated B alance Sheets (in thousands, except share and per share data) December 31, December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 125,206 $ 41,765 Accounts receivable, net of allowances of $ 6,783 and $ 4,467 , respectively 112,558 111,513 Inventories 98,853 97,934 Assets held for sale 26,253 16,625 Prepaid expenses and other current assets 69,039 55,256 Total current assets 431,909 323,093 Non-current assets: Property and equipment, net 117,274 119,125 Intangible assets, net 248,818 275,331 Goodwill 193,187 184,831 Operating lease right-of-use assets 57,990 68,465 Investment in convertible note — 4,207 Other non-current assets, net of allowances of $ 538 and $ 861 , respectively 44,928 36,870 Deferred income taxes 209,666 217,309 Total non-current assets 871,863 906,138 Total assets $ 1,303,772 $ 1,229,231 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 92,514 $ 67,231 Accrued liabilities 139,020 81,889 Deferred revenue 35,194 30,408 Current portion of long-term debt 2,500 2,500 Total current liabilities 269,228 182,028 Non-current liabilities: Long-term debt 833,579 831,581 Non-current operating lease liabilities 55,772 68,178 Other non-current liabilities 44,064 78,120 Total non-current liabilities 933,415 977,879 Total liabilities 1,202,643 1,159,907 Commitments and contingencies (Note 17) Stockholders’ equity Common stock, par value $ 0.0001 per share; 500,000,000 shares authorized at December 31, 2025 and December 31, 2024; 134,511,275 and 144,095,996 shares issued at December 31, 2025 and December 31, 2024, respectively; and 134,511,275 and 130,918,997 shares outstanding at December 31, 2025 and December 31, 2024, respectively 13 14 Additional paid-in capital 1,288,294 1,460,270 Accumulated other comprehensive income 44 5,567 Treasury stock, at cost — ( 196,382 ) Accumulated deficit ( 1,187,222 ) ( 1,200,145 ) Total stockholders’ equity 101,129 69,324 Total liabilities and stockholders’ equity $ 1,303,772 $ 1,229,231 See the Notes to Consolidated Financial Statements 64 Gogo Inc. and Subsidiaries Consolidated Statem ents of Operations (in thousands, except per share amounts) For the Years Ended December 31, 2025 2024 2023 Revenue: Service revenue $ 774,393 $ 364,270 $ 318,015 Equipment revenue 136,098 80,439 79,562 Total revenue 910,491 444,709 397,577 Operating expenses: Cost of service revenue (exclusive of items shown below) 372,728 99,042 69,568 Cost of equipment revenue (exclusive of items shown below) 134,676 67,561 63,383 Engineering, design and development 56,143 44,772 36,683 Sales and marketing 55,841 38,020 29,797 General and administrative 116,741 125,071 57,280 Depreciation and amortization 60,279 18,972 16,701 Total operating expenses 796,408 393,438 273,412 Operating income 114,083 51,271 124,165 Other expense (income): Interest income ( 4,676 ) ( 8,336 ) ( 7,403 ) Interest expense 68,217 38,431 33,056 Change in fair value of earnout liability 11,800 — — Loss on extinguishment of debt — — 2,224 Other (income) expense, net 11,930 3,042 ( 1,315 ) Total other expense 87,271 33,137 26,562 Income before income taxes 26,812 18,134 97,603 Income tax provision (benefit) 13,889 4,388 ( 48,075 ) Net income $ 12,923 $ 13,746 $ 145,678 Net income attributable to common stock per share: Basic $ 0.10 $ 0.11 $ 1.12 Diluted $ 0.09 $ 0.10 $ 1.09 Weighted average number of shares Basic 133,707 128,533 129,753 Diluted 136,593 131,455 133,283 See the Notes to Consolidated Financial Statements 65 Gogo Inc. and Subsidiaries Consolidated Statements of Comprehensive Income (in thousands) For the Years Ended December 31, 2025 2024 2023 Net income $ 12,923 $ 13,746 $ 145,678 Other comprehensive income (loss), net of tax Currency translation adjustments 712 ( 823 ) 291 Cash flow hedges: Amount recognized in other comprehensive income ( 814 ) 4,413 4,579 Less: income realized and reclassified to earnings 5,421 13,819 19,202 Changes in fair value of cash flow hedges ( 6,235 ) ( 9,406 ) ( 14,623 ) Other comprehensive loss, net of tax ( 5,523 ) ( 10,229 ) ( 14,332 ) Comprehensive (loss) income $ 7,400 $ 3,517 $ 131,346 See the Notes to Consolidated Financial Statements 66 Gogo Inc. and Subsidiaries Consolidated Statem ents of Cash Flows (in thousands) For the Years Ended December 31, 2025 2024 2023 Operating activities: Net income $ 12,923 $ 13,746 $ 145,678 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 60,279 18,972 16,701 Loss on asset disposals, abandonments and write-downs 504 2,932 362 Provision for expected credit losses 1,504 3,803 1,233 Deferred income taxes 9,957 3,245 ( 49,172 ) Stock-based compensation expense 24,072 20,777 21,288 Amortization of deferred financing costs and interest rate caps 5,518 5,147 3,894 Accretion of debt discount 1,752 510 403 Change in fair value of earnout liability 11,800 — — Change in fair value of convertible note and gain on sale of equity investment 3,552 793 ( 1,343 ) Loss on extinguishment of debt — — 2,224 Changes in operating assets and liabilities: Accounts receivable ( 4,954 ) 2,971 4,833 Inventories ( 1,081 ) ( 16,224 ) ( 13,694 ) Prepaid expenses and other current assets ( 9,404 ) ( 13,417 ) ( 49,891 ) Contract assets ( 14,230 ) ( 7,138 ) 3,217 Accounts payable 10,551 ( 11,295 ) 3,658 Accrued liabilities 21,870 11,153 4,351 Deferred revenue ( 5,440 ) 3,621 ( 2,411 ) Accrued interest ( 2,052 ) 1,715 ( 9,409 ) Other non-current assets and liabilities ( 2,631 ) 110 ( 2,952 ) Net cash provided by operating activities 124,490 41,421 78,970 Investing activities: Purchases of property and equipment ( 59,377 ) ( 13,504 ) ( 16,267 ) Acquisition of intangible assets ( 15,784 ) ( 13,551 ) ( 7,821 ) Acquisition of Satcom Direct, net of cash acquired ( 1,612 ) ( 332,724 ) — Proceeds from FCC Reimbursement Program for property, equipment and intangibles 29,282 4,395 1,130 Proceeds from interest rate caps 10,570 23,181 26,675 Redemptions of short-term investments — — 74,179 Purchases of short-term investments — — ( 49,383 ) Purchases of convertible note and equity investment ( 3,000 ) ( 5,000 ) ( 5,000 ) Proceeds from sale of equity investment — — 6,343 Net cash (used in) provided by investing activities ( 39,921 ) ( 337,203 ) 29,856 Financing activities: Proceeds from term loan, net of discount — 245,000 — Payment of debt issuance costs — ( 4,020 ) — Repurchases of common stock — ( 33,185 ) ( 4,822 ) Payments on term loan ( 2,500 ) ( 6,063 ) ( 107,250 ) Payments on finance leases ( 41 ) ( 31 ) ( 132 ) Stock-based compensation activity 1,190 ( 3,010 ) ( 8,230 ) Net cash provided by (used in) financing activities ( 1,351 ) 198,691 ( 120,434 ) Effect of foreign exchange rate changes on cash 168 29 94 Increase (decrease) in cash, cash equivalents and restricted cash 83,386 ( 97,062 ) ( 11,514 ) Cash, cash equivalents and restricted cash at beginning of period 42,304 139,366 150,880 Cash, cash equivalents and restricted cash at end of period $ 125,690 $ 42,304 $ 139,366 Cash, cash equivalents and restricted cash at end of period $ 125,690 $ 42,304 $ 139,366 Less: current restricted cash 88 70 — Less: non-current restricted cash 396 469 330 Cash and cash equivalents at end of period $ 125,206 $ 41,765 $ 139,036 Supplemental cash flow information: Cash paid for interest $ 77,806 $ 56,150 $ 68,145 Cash paid for taxes, net $ 3,400 $ 3,098 $ 1,004 Non-cash investing activities: Fair value of shares issued in acquisition of Satcom Direct $ — $ 40,500 $ — Purchases of property and equipment in current liabilities $ 16,486 $ 5,139 $ 4,801 See the Notes to Consolidated Financial Statements 67 Gogo Inc. and Subsidiaries Consolidated Statements of St ockholders’ Equity (in thousands, except share data) Accumulated Additional Other Common Stock Paid-In Comprehensive Accumulated Treasury Stock Shares Par Value Capital Income Deficit Shares Amount Total Balance at January 1, 2023 127,840,813 $ 14 $ 1,385,933 $ 30,128 $ ( 1,359,569 ) 8,690,549 $ ( 158,375 ) $ ( 101,869 ) Net income — — — — 145,678 — — 145,678 Currency translation adjustments, net of tax — — — 291 — — — 291 Fair value adjustments of cash flow hedges, net of tax — — — ( 14,623 ) — — — ( 14,623 ) Stock-based compensation expense — — 21,288 — — — — 21,288 Issuance of common stock upon exercise of stock options 218,585 — 565 — — — — 565 Issuance of common stock upon vesting of restricted stock units 853,080 — — — — — — — Tax withholding related to vesting of restricted stock units — — ( 6,188 ) — — — — ( 6,188 ) Issuance of common stock in connection with employee stock purchase plan 29,257 — 405 — — — — 405 Repurchase of common stock ( 479,392 ) — — — — 479,392 ( 4,822 ) ( 4,822 ) Balance at December 31, 2023 128,462,343 14 1,402,003 15,796 ( 1,213,891 ) 9,169,941 ( 163,197 ) 40,725 Net income — — — — 13,746 — — 13,746 Currency translation adjustments, net of tax — — — ( 823 ) — — — ( 823 ) Fair value adjustments of cash flow hedges, net of tax — — — ( 9,406 ) — — — ( 9,406 ) Stock-based compensation expense — — 20,777 — — — — 20,777 Issuance of common stock upon exercise of stock options 236,979 — 630 — — — — 630 Issuance of common stock upon vesting of restricted stock units 1,190,029 — — — — — — — Tax withholding related to vesting of restricted stock units — — ( 3,903 ) — — — — ( 3,903 ) Issuance of common stock in connection with employee stock purchase plan 36,704 — 263 — — — — 263 Shares issued in acquisition of Satcom Direct 5,000,000 — 40,500 — — — — 40,500 Repurchase of common stock ( 4,007,058 ) — — — — 4,007,058 ( 33,185 ) ( 33,185 ) Balance at December 31, 2024 130,918,997 14 1,460,270 5,567 ( 1,200,145 ) 13,176,999 ( 196,382 ) 69,324 Net income — — — — 12,923 — — 12,923 Currency translation adjustments, net of tax — — — 712 — — — 712 Fair value adjustments of cash flow hedges, net of tax — — — ( 6,235 ) — — — ( 6,235 ) Stock-based compensation expense — — 24,072 — — — — 24,072 Issuance of common stock upon exercise of stock options 1,523,441 1 4,922 — — — — 4,923 Issuance of common stock upon vesting of restricted stock units 1,958,500 — — — — — — — Tax withholding related to vesting of restricted stock units — — ( 5,374 ) — — — — ( 5,374 ) Issuance of common stock in connection with employee stock purchase plan 110,337 — 784 — — — — 784 Retirement of treasury stock — ( 2 ) ( 196,380 ) — — ( 13,176,999 ) 196,382 — Balance at December 31, 2025 134,511,275 $ 13 $ 1,288,294 $ 44 $ ( 1,187,222 ) — $ — $ 101,129 See the Notes to Consolidated Financial Statements 68 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements 1. Summary of Significant Accounting Policies Principles of Consolidation - The consolidated financial statements include our wholly owned subsidiaries. All intercompany transactions and account balances have been eliminated. Segments - As a result of the Company’s acquisition of Satcom Direct on December 3, 2024, as described in Note 2, “Acquisition of Satcom Direct,” the Company initially had two reportable segments on December 3, 2024: the legacy pre-acquisition operations of the Company and the acquired entities of Satcom Direct. However, during the third quarter of 2025, the Company’s chief operating decision maker (“CODM”), who is the Chief Executive Officer, started making resource and operating decisions by evaluating the performance and business results of the consolidated company. As such, the Company has a single reportable segment as of December 31, 2025. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates the significant estimates and bases such estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances. However, actual results could differ materially from those estimates. Cash, Cash Equivalents and Short-Term Investments - We consider cash and cash equivalents to be short-term, highly liquid investments that have the following characteristics: readily convertible to known amounts of cash, so near their maturities that there is insignificant risk of changes in value due to any changes in market interest rates, and having maturities of three months or less when purchased. We continually monitor positions with, and the credit quality of, the financial institutions with which we invest. The carrying amounts reported in the balance sheets for cash and cash equivalents approximate the fair market value of these assets. We consider short-term investments to be investments with maturities of twelve months or less (but greater than three months). Allowance for Credit Losses - We regularly evaluate our accounts receivable, contract assets and other receivables within the scope of ASC 326, Financial Instruments - Credit Losses , for expected credit losses. Our current expected credit loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions, and a review of the current status of each customer’s trade accounts receivables. Due to the short-term nature of such receivables, the estimated amount of accounts receivable that may not be collected is based on the aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. Our monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of each customer’s financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. We apply a similar methodology to our current and non-current contract asset balances. However, due to the inherent additional risk associated with a long-term receivable, an additional provision for credit loss is applied to contract asset balances that will diminish over time as the contract nears its expiration date. Estimates are used to determine the expected loss allowances. Such allowances are based on management’s assessment of anticipated payment, taking into account available historical and current information as well as management’s assessment of potential future developments. We are continuously monitoring our assumptions used to determine our expected credit losses which could cause us to record additional material credit losses in future periods. Restricted Cash - Certain cash amounts are restricted as to use and are classified outside of cash and cash equivalents. Cash amounts with restrictions of twelve months or less are included in Prepaid expenses and other current assets and amounts restricted for greater than twelve months are included in Other non-current assets in our consolidated balance sheets. Our restricted cash balances were $ 0.5 million and $ 0.5 million as of December 31, 2025 and 2024 , respectively, and consisted of letters of credit issued for the benefit of the landlords of our various office locations and the tower operators for certain of our cell sites. Concentrations of Credit Risk - Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash and cash equivalents. All cash and cash equivalents are invested with creditworthy financial institutions. Income Tax - We use an asset- and liability-based approach in accounting for income taxes. Deferred income tax assets and liabilities are recorded for tax attributes and are based on the differences between the financial statement and tax basis of assets and liabilities, applying enacted statutory tax rates in effect for the year in which the tax differences are expected to reverse. We regularly assess the need for a valuation allowance related to our deferred income tax assets to determine, based on the weight of the available positive and negative evidence, whether it is more likely than not that some or all of such deferred assets will not be realized. We also consider the existence of any uncertain tax positions and, as necessary, provide a reserve for any uncertain tax positions at each reporting date. 69 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) See Note 15, “Income Tax,” for further details. Inventories - Inventories consist primarily of telecommunications systems and parts and are recorded at the lower of average cost or net realizable value. We evaluate the need for write-downs associated with obsolete, slow-moving and nonsalable inventory by reviewing net realizable inventory values on a periodic basis. See Note 6, “Composition of Certain Balance Sheet Accounts,” for further details. Property and Equipment and Depreciation - Property and equipment, including leasehold improvements, are stated at historical cost, less accumulated depreciation. Network asset inventory and construction in progress, which include materials, transmission and related equipment, interest and other costs relating to the construction and development of our network, are not depreciated until they are put into service. Network equipment consists of switching equipment, antennas, base transceiver stations, site preparation costs, and other related equipment used in the operation of our network. Depreciation expense totaled $ 20.4 million , $ 15.1 million and $ 14.7 million for the years ended December 31, 2025, 2024 and 2023. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives for owned assets, which are as follows: Office equipment, furniture, fixtures and other 3 -7 years Leasehold improvements 7 - 13 years Buildings 29- 39 years Network equipment 5 - 25 years See Note 6, “Composition of Certain Balance Sheet Accounts,” for further details. Improvements to leased property are depreciated over the shorter of the useful life of the improvement or the term of the related lease. We reassess the useful lives of leasehold improvements when there are changes to the terms of the underlying lease. Such reassessment has resulted in the useful life of specific assets being adjusted to a shorter period than originally estimated, resulting in an increase in annual depreciation expense for those assets. Repairs and maintenance costs are expensed as incurred. Assets Held for Sale - Assets that meet the accounting requirements to be classified as held for sale are separated in a disposal group and are included in assets held for sale on the consolidated balance sheets. At the time we classify an asset as held for sale, we cease recording depreciation and amortization. These assets are measured and reported at the lower of the carrying amount or its estimated fair value, less estimated costs to sell. Software Development Costs - We capitalize costs for network and non-network software developed or obtained for internal use during the application development stage. These costs include purchased software and direct costs associated with the development and configuration of internal use software that supports the operation of our service offerings. These costs are included in Intangible assets, net, in our consolidated balance sheets and, when the software is placed in service, are amortized on a straight-line basis over their estimated useful lives. Costs incurred in the preliminary project and post-implementation stages, as well as maintenance and training costs, are expensed as incurred. With respect to software sold as part of our equipment sales, we capitalize software development costs once technological feasibility has been established. Such capitalized software costs are included in Intangible assets, net, in our consolidated balance sheets and amortized on a product-by-product basis over the remaining estimated economic life of the product, based on the greater of the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product or the straight-line method. Goodwill and Other Intangible Assets - Intangible assets with indefinite lives are not amortized but are reviewed for impairment at least annually or whenever events or circumstances indicate the carrying value of the asset may not be recoverable. Our FCC Licenses, as defined in Note 8, “Intangible Assets,” and the goodwill related to the acquisition of Satcom Direct are our only material indefinite-lived intangible assets. We perform our annual impairment tests during the fourth quarter of each fiscal year. We assess qualitative and quantitative factors to determine the likelihood of impairment. Our qualitative analysis includes, but is not limited to, assessing the changes in macroeconomic conditions, regulatory environment, industry and market conditions, financial performance versus budget and any other events or circumstances specific to the indefinite-lived intangible assets. If it is more likely than not that the fair value of the indefinite-lived intangible assets is greater than the carrying value, no further testing is required. If our qualitative analysis indicates more testing is required, or if we elect not to perform a qualitative analysis, we will apply the quantitative impairment test method. Our quantitative impairment assessment considers both the market and income approaches to estimate fair value. Specific for goodwill impairment testing, the market approach estimates fair value using financial multiples of comparable companies. The income approach estimates fair value based upon projections of future revenues, expenses, and cash flows discounted to their respective present values. The resu lts of our annual indefinite-lived intangible asset impairment assessments for 2025, 2024 and 2023 indicated no impairment. 70 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) Intangible assets that are deemed to have a finite life are amortized over their useful lives as follows: Software 3 - 8 years Other 5 - 8 years Service customer relationships 5 - 7 years OEM and dealer relationships 8 - 10 years See Note 8, “Intangible Assets,” for further details. Long-Lived Assets - We review our long-lived assets to determine potential impairment whenever events indicate that the carrying amount of such assets may not be recoverable. We do this by comparing the carrying value of the long-lived assets with the estimated future undiscounted cash flows expected to result from the use of the assets, including cash flows from disposition. If we determine an impairment exists, the asset is written down to estimated fair value. There were no impairments of long-lived assets in 2025, 2024 or 2023 . Business Combinations - The Company uses its best estimates and assumptions to determine the fair value of tangible and intangible assets acquired and liabilities assumed, as well as the uncertain tax positions and tax-related valuation allowances that are initially recorded in connection with a business combination. These estimates and assumptions are uncertain and may require adjustment. During the measurement period of one year from the acquisition date, the Company continues to collect information and reevaluates these estimates and assumptions, and records adjustments to these estimates to goodwill. Any adjustments to the acquired assets and liabilities assumed that are identified subsequent to the measurement period are recorded in earnings. See Note 2, “Acquisition of Satcom Direct,” for further information. Revenue Recognition - Our revenue is primarily earned from providing connectivity and entertainment services and through sales of equipment. The Company has three main connectivity solutions, each with its own equipment solution: Satellite Broadband, ATG and Narrowband. We determine revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue as we satisfy the performance obligations. Service revenue primarily consists of subscription and usage fees paid by aircraft owners and operators for telecommunication, data, and in-flight entertainment services and is recognized as the services are provided to the customer. Equipment revenue primarily consists of proceeds from the sale of ATG and satellite connectivity equipment and is recognized when control of the equipment is transferred to the customer, which generally occurs when the equipment is shipped. In all cases, we evaluate whether a contract exists as it relates to collectability of the contract. Once a contract is deemed to exist, we evaluate the transaction price and deliverables under the contract. A limited number of contracts contain multiple equipment and service deliverables. For these contracts, we account for each distinct good or service as a separate performance obligation. We allocate the contract’s transaction price to each performance obligation using the relative standalone selling price, which is based on the actual selling price for any good or service sold separately to a similar class of customer. See Note 4, “Revenue Recognition,” for further information. Government Assistance - In July 2023, the Company elected to participate in the Federal Communications Commission (“FCC”) Secure and Trusted Communications Networks Reimbursement Program (the “FCC Reimbursement Program”). There is currently no effective applicable authoritative guidance under GAAP to account for this government grant. Therefore, we have elected to apply International Accounting Standard (“IAS”) 20 Accounting for Government Grants and Disclosure of Government Assistance by analogy. Under IAS 20, government grants related to assets are presented as either deferred income that is recognized on a systematic basis over the useful life of the asset or by deducting the grant from the carrying value of the asset. The Company has elected to deduct the grant from the carrying value of the asset. For grants related to income, the Company has elected to recognize these grants as a deduction from the related expense. Grant receivables from the FCC are recorded by the Company once there is reasonable assurance that the Company will comply with the conditions of the grant and the grant will be received. See Note 5, “Government Assistance,” for additional information. 71 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) Research and Development Costs - Expenditures for research and development are charged to expense as incurred and totaled $ 56.1 million , $ 44.8 million and $ 36.7 million for the years ended December 31, 2025, 2024 and 2023 , respectively. Research and development costs are reported as engineering, design and development expenses in our consolidated statements of operations. Warranty - We provide warranties on parts and labor related to our products. Our warranty terms range from two to five years. Warranty reserves are established for costs that are estimated to be incurred after the sale, delivery and installation of the products under warranty. The warranty reserves are determined based on known product failures, historical experience and other available evidence, and are included in accrued liabilities in our consolidated balance sheets. See Note 7, “Composition of Certain Reserves and Allowances,” for the details of the changes in our warranty reserve. Asset Retirement Obligations - We have certain asset retirement obligations related to contractual commitments to remove our network equipment and other assets from leased cell sites upon termination of the site leases. The asset retirement obligations are classified as a noncurrent liability in our consolidated balance sheets. See Note 6, “Composition of Certain Balance Sheet Accounts,” for the details of the changes in our asset retirement obligations. Fair Value of Financial Instruments - We group financial assets and financial liabilities measured at fair value into three levels of hierarchy based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. A three-tier fair value hierarchy has been established which prioritizes the inputs used in measuring fair value. These tiers include: • Level 1 - defined as observable inputs such as quoted prices for identical assets or liabilities in active markets; • Level 2 - defined as observable inputs other than Level 1 inputs such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. See Note 12, “Fair Value of Financial Assets and Liabilities,” for further information. Derivatives - We are exposed to interest rate risk on our variable rate borrowings. We currently use interest rate caps to manage a portion of our exposure to interest rate changes, and have designated these interest rate caps as cash flow hedges for accounting purposes. We account for these interest rate caps in accordance with ASC 815, Derivatives and Hedging , which requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the balance sheet. We record the effective portion of changes in the fair value of our cash flow hedges to other comprehensive income (loss), net of tax, and subsequently reclassify these amounts into earnings in the period during which the hedged transaction is recognized. See Note 10, “Derivative Instruments and Hedging Activities,” for further information. Earnings Per Share - We calculate basic earnings per share using the weighted-average number of common shares outstanding during the period. We calculate diluted earnings per share using the weighted-average number of common shares outstanding and all dilutive potential common shares outstanding. See Note 3, “Earnings Per Share,” for further information. Stock-Based Compensation Expense - Compensation cost is measured and recognized at fair value for all stock-based payments, including stock options and performance share units (“PSUs”). For time-based vesting stock options, we estimate fair value using the Black-Scholes option-pricing model, which requires assumptions such as expected volatility, risk-free interest rate, expected life, and dividends. The fair value of PSUs are determined using a Monte Carlo simulation, which requires assumptions such as expected term, volatility, risk-free interest rate and dividends. Forfeitures are recognized when they occur. Restricted stock units (“RSUs”) and restricted stock are measured based on the fair market value of the underlying stock on the date of grant. Our stock-based compensation expense is recognized over the applicable vesting period and is included in the same operating expense line items in the consolidated statements of operations as the base cash compensation paid to the underlying employees . See Note 14, “Stock-Based Compensation and Retirement Plans,” for further information. Treasury Stock - When the Company’s stock is retired or repurchased for constructive retirement (with or without an intention to retire the stock formally in accordance with applicable laws), any excess of par or stated value over the cost of treasury shares is credited to additional paid-in capital. 72 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) Leases - We have operating lease agreements for which w e have recorded lease liabilities and right-of-use assets for leases primarily related to cell sites, data centers and office buildings. We determine whether a contract contains a lease at contract inception and calculate the lease liability and right-of-use asset using our incremental borrowing rate. Our cell site leases generally have terms of five to ten years , with renewal options for an additional five to 25 years . For certain cell sites, the renewal options are deemed to be reasonably certain to be exercised. Our data center leases have original terms between one to four years with unlimited one-year renewal options, some of which are reasonably certain to be exercised. Our building leases have original terms of ten years , with renewal options for an additional five years . We recogni ze operating lease expense on a straight-line basis over the lease term. We have finance leases for computer and office equipment. Covenants within the Facilities contain certain restrictions on our ability to enter into new finance lease arrangements. See Note 16, “Leases,” for further information. Advertising Costs - Costs for advertising are expensed as incurred. Debt Issuance Costs - We defer loan origination fees and financing costs related to our various debt offerings as deferred financing costs. Additionally, we defer fees paid directly to the lenders related to amendments of our debt offerings as deferred financing costs. We amortize these costs over the term of the underlying debt obligation using the effective interest method and include them in interest expense in the consolidated statement of operations. The fees incurred but not paid directly to the lenders in connection with amendments are expensed as incurred to interest expense. Deferred financing costs associated with future debt issuances are written off in the period during which we determine that the debt will no longer be issued. See Note 9, “Long-Term Debt and Other Liabilities,” for further information. Comprehensive (Loss) Income - Comprehensive (loss) income for the years ended December 31, 2025, 2024 and 2023 is net income plus or minus unrealized gains and losses on foreign currency translation adjustments and the changes in fair value of cash flow hedges. Foreign Currency Translation - The assets and liabilities of foreign subsidiaries are prepared in their respective functional currencies and translated into U.S. Dollars based on the exchange rates in effect on the balance sheet date. Items in the consolidated statements of operations are translated at the average exchange rates for the periods presented. The related translation adjustments are recorded in accumulated other comprehensive income on the consolidated balance sheets. Gains and losses resulting from foreign currency transactions are recognized in other (income) expense, net on the consolidated statements of operations. Recently Issued Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). ASUs not listed below were assessed and determined to be either not applicable or expected to have minimal impact on our consolidated financial statements and related notes. Accounting standards adopted: In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures, most notably in the tax rate reconciliation and income taxes paid. This guidance is effective for annual periods beginning after December 15, 2024. The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. See Note 15, “Income Tax,” for further information. Accounting standards not yet adopted: In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses which requires disclosure about specific types of expenses included in the expense captions presented in the Consolidated Statements of Operations. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and the amendments should be applied on a prospective basis, however, retrospective application is permitted. We are currently evaluating the impact that this guidance will have upon our consolidated financial statements and related notes. In September 2025, the FASB issued ASU No. 2025-06, Intangibles-Goodwill and Other Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which details the criteria for capitalization of internal-use software costs. The ASU is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, and may be adopted on a prospective, modified, or retrospective transition approach, and early adoption is permitted. We are currently evaluating the impact that this guidance will have upon our consolidated financial statements and related notes. In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities , which establishes authoritative guidance on the recognition, measurement, presentation and disclosure 73 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) of government grants. The ASU is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact that this guidance will have upon our consolidated financial statements and related notes. 2. Acquisition of Satcom Direct On December 3, 2024 (the “Closing”), the Company completed its acquisition of 100 % of the issued and outstanding equity interests in Satcom Direct , LLC, a Delaware limited liability company (f/k/a Satcom Direct, Inc., a Florida corporation) and certain of its affiliates and their collective subsidiaries (collectively, “Satcom Direct”), pursuant to the terms of the purchase agreement, dated as of September 29, 2024 (the “Purchase Agreement”). Satcom Direct operates worldwide with an international sales and service team based in nine countries. Satcom Direct sells its in-flight connectivity and communication services and equipment globally through their international sales force to OEMs, governments, military, and private fleet companies, among others. In accordance with the terms of the Purchase Agreement, on the Closing the Company purchased all of the issued and outstanding equity interests in Satcom Direct in exchange for: (i) an aggregate cash purchase amount of $ 375 million, subject to customary post-closing adjustments (the “Cash Consideration”), (ii) five million restricted shares (the “Stock Consideration”) of the Company’s common stock, par value of $ 0.0001 per share (“Common Stock”), and (iii) up to an additional $ 225 million in potential earnout payments of cash and/or Common Stock tied to realizing certain financial performance milestones over the next four years (the “Earnout Consideration” and, together with the Cash Consideration and Stock Consideration, the “Acquisition Consideration”). The Cash Consideration was financed via the Company’s $ 250 million HPS Credit Agreement (as defined below) and the remainder with cash on hand. As of December 31, 2025 and 2024, the Earnout Consideration has an estimated fair value of $ 71.9 million and $ 53.0 million, respectively. As of December 31, 2025, $ 33.0 million of the Earnout Consideration is included in Other non-current liabilities on the Consolidated Balance Sheets, with the remainder in Accrued liabilities. As of December 31, 2024, the entire amount of the earnout liability was included in Other non-current liabilities. The fair value of the Earnout Consideration was calculated using a Monte Carlo simulation based on future gross profit projections of Satcom Direct, gross profit volatility rates of comparable companies and a risk adjusted discount rate. The fair value measurement was based on significant unobservable inputs and thus represents a Level 3 measurement. The following table summarizes the fair value of the Acquisition Consideration at Closing ( in thousands ): Estimated Aggregate Acquisition Consideration Share consideration Common Stock issued per the Purchase Agreement 5,000 Share price on December 2, 2024 8.10 Stock Consideration $ 40,500 Cash Consideration $ 346,900 Settlement of pre-existing relationship $ 393 Estimated fair value of Earnout Consideration $ 60,100 Fair value of estimated aggregate Acquisition Consideration $ 447,893 The Company allocated the purchase price to the net identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition using the acquisition method of accounting for business combinations. The excess of the purchase price over the estimated fair value of the net assets and liabilities was allocated to goodwill. The Company determined the estimated fair values after review and consideration of relevant information as of the Closing, including discounted cash flows, quoted market prices and estimates made by management. The Company finalized its fair value determination of the acquired assets and assumed liabilities during the fourth quarter of 2025. During the year ended December 31, 2025, measurement period adjustments were recorded to increase Goodwill by $ 8.4 million primarily related to the fair value of certain liabilities that were not finalized as of the Closing and deferred tax impacts related to the allocation of goodwill. The following table summarizes the fair values of assets acquired and liabilities assumed as of the Closing based on the purchase price allocation and measurement period adjustments ( in thousands ): 74 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) Aggregate Purchase Price Allocation Fair value of estimated total Acquisition Consideration $ 447,893 Assets acquired Cash and cash equivalents $ 12,563 Accounts receivable, net of allowances 67,703 Inventories 18,353 Prepaid expenses and other current assets 13,348 Assets held for sale 16,625 Property and equipment, net 26,847 Intangible assets, net 213,300 Operating lease right-of-use assets 3,202 Other non-current assets, net of allowances 5,601 Deferred income taxes 1,367 Total assets acquired $ 378,909 Liabilities assumed Accounts payable 62,814 Accrued liabilities 19,918 Deferred revenue 25,790 Non-current operating lease liabilities 2,706 Other non-current liabilities 12,355 Total liabilities assumed $ 123,583 Net assets acquired $ 255,326 Goodwill $ 192,567 The allocation of the purchase price presented above was based on management's estimate of the fair values of the acquired assets and assumed liabilities using valuation techniques including income, cost and market approaches. These valuation techniques incorporate the use of future projected revenues and cash flows as well as estimated discount rates. Current and noncurrent assets and liabilities are valued at historical carrying values, which approximate fair value, except as described below. The fair value measurements discussed below were based on significant inputs that are not observable and thus represent a Level 3 measurement. Inventories were valued using a combination of the comparative sales method, which estimated the expected sales price of the products, reduced by all costs expected to be incurred to complete the inventory, as well as a profit on the sale and estimated replacement cost. Assets held for sale represent the corporate facility of Satcom Direct and associated land in Melbourne, Florida. Assets held for sale were valued using the income approach less the direct costs associated with selling the assets. Additionally, in the fourth quarter of 2025, the Company decided to sell its data center and associated land in Melbourne, Florida and moved those assets to Assets held for sale on the Consolidated Balance Sheets as of December 31, 2025. The Company expects to sell the assets within the next twelve months. Property and equipment, net were valued using a combination of the cost and market approaches. Customer relationships represent the fair value of future projected revenue that will be derived from sales of connectivity services and equipment to existing customers of Satcom Direct. Customer relationships were valued using the multi-period excess earnings method. This method of valuation reflects the present value of the projected cash flows that are expected to be generated by these existing customers less charges representing the contribution of other assets to those cash flows. Software and the tradename were valued under the relief from royalty method, which is equal to the present value of the after-tax royalty savings attributable to owning the software or tradename as opposed to paying a third party for its use. The estimated fair value of operating leases was determined based on current market terms, which resulted in a net unfavorable adjustment to the right-of-use asset. After assessing the preliminary fair value of the net assets acquired and liabilities assumed, the Company recorded goodwill of $ 184.2 million as of December 31, 2024. As a result of subsequent measurement period adjustments, the balance of acquired goodwill increased to $ 192.6 million as of December 31, 2025. Of the total goodwill amount, $ 164.1 million is expected to be deductible for U.S. income tax purposes. The goodwill is attributable to the assembled workforce, synergies, and economies of scale. The following table summarizes the key information underlying identifiable finite lived intangible assets related to the Satcom Direct acquisition ( in thousands ): 75 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) Weighted Average Estimated Useful Life (In Years) Estimated Fair Value Software 8 $ 55,200 Service customer relationships 5 144,600 OEM customer relationships 8 10,300 Tradename 5 3,200 Total intangible assets 213,300 Supplemental Pro-Forma Information (Unaudited) The following table presents supplemental pro-forma information for the years ended December 31, 2024 and 2023 as if the acquisition of Satcom Direct had occurred on January 1, 2023. The amounts have been calculated after applying the Company’s accounting policies and are based upon currently available information. The unaudited pro-forma information for the periods presented includes the following adjustments, where applicable, for business combination accounting effects resulting from the acquisition: (i) the change in Cost of Equipment to reflect the fair value change in inventory, (ii) incremental stock compensation expense, and adjustments for change in control bonuses that vest after the Close as post-combination compensation expense, (iii) additional Depreciation and amortization expense related to the step up in fair value for finite-lived intangible assets and property and equipment acquired, (iv) removal of historical interest expense associated with Satcom Direct’s historical indebtedness which was extinguished upon consummation of the acquisition and the addition of interest expense related to financing the acquisition (refer to Note 9, “Long-Term Debt and Other Liabilities,” for additional information), and (v) the related tax effects assuming the acquisition occurred on January 1, 2023. Pre-acquisition revenue and net income amounts for Satcom Direct were derived from the books and records prepared prior to the acquisition and are presented for informational purposes only and do not purport to be indicative of the results of future operations or of the results that would have occurred had the acquisition taken place as of the date noted below. For the Year Ended December 31, (in thousands) 2024 2023 Total revenue $ 897,284 $ 845,177 Net income $ 17,579 $ 140,196 3. Earnings Per Share Basic and diluted earnings per share have been calculated using the weighted-average number of common shares outstanding for the period. Diluted earnings per share was computed using the treasury stock method for stock-based compensation. Contingently issuable shares are only included in the diluted earnings per share computation once all necessary conditions have been satisfied. The diluted earnings per share calculations exclude the effect of stock options, deferred stock units, RSUs, PSUs and the potential Earnout Consideration when the computation is anti-dilutive. For the years ended December 31, 2025, 2024 and 2023, the weighted average number of shares excluded from the computation was 32.0 million , 4.6 million and 1.8 million shares, respectively. The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2025, 2024 and 2023 ( in thousands, except per share amounts ): For the Years Ended December 31, Basic 2025 2024 2023 Net income $ 12,923 $ 13,746 $ 145,678 Weighted average shares outstanding 133,707 128,533 129,753 Earnings per share - basic $ 0.10 $ 0.11 $ 1.12 For the Years Ended December 31, Diluted 2025 2024 2023 Net income $ 12,923 $ 13,746 $ 145,678 Average shares Weighted average shares outstanding 133,707 128,533 129,753 Effect of dilutive securities - stock-based compensation 2,886 2,922 3,530 Total weighted average diluted shares outstanding 136,593 131,455 133,283 Earnings per share - diluted $ 0.09 $ 0.10 $ 1.09 76 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) 4. Revenue Recognition Remaining Performance Obligations As of December 31, 2025, the aggregate amount of the transaction price in our contracts allocated to the remaining unsatisfied performance obligations (“RPO”) was approximately $ 572 million and excludes consideration from contracts that have an original duration of one year or less. Approximately $ 560 million of the RPO primarily represents connectivity and entertainment service revenues which are recognized as services are provided, which is expected to occur through the remaining term of the contracts. Our contracts vary in length and generally have terms of two to ten years . We expect to recognize approximately 36 % of our connectivity and entertainment service RPO within the next year, approximately 48 % in one to five years and the remaining 16 % in five to ten years . The remaining $ 12 million of the RPO represents future equipment revenue that is expected to be recognized primarily within the next three y ears as equipment is shipped. Disaggregation of revenue The following table presents our revenue disaggregated by category (in thousands) : For the Year Ended December 31, 2025 2024 2023 Service revenue by type Satellite broadband $ 316,641 $ 27,988 $ 3,626 ATG broadband 288,597 310,860 302,226 Narrowband and other 169,155 25,422 12,163 Total service revenue by type $ 774,393 $ 364,270 $ 318,015 Service revenue by market Business aviation $ 657,911 $ 358,572 $ 318,015 Military / Government 116,482 5,698 — Total service revenue by market $ 774,393 $ 364,270 $ 318,015 Equipment revenue Satellite broadband $ 34,725 $ 2,001 $ 1,030 ATG broadband 76,204 66,607 64,585 Narrowband and other 25,169 11,831 13,947 Total equipment revenue $ 136,098 $ 80,439 $ 79,562 Contract balances Our current and non-current contract asset balances totaled $ 39.6 million and $ 25.0 million as of December 31, 2025 and 2024, respectively. Contract assets represent the aggregate amount of revenue recognized in excess of billings and recoverable contract costs primarily for certain sales programs. Our current and non-current deferred revenue balances totaled $ 36.0 million and $ 41.3 million as of December 31, 2025 and 2024, respectively. Deferred revenue includes, among other things, prepayments for equipment and subscription connectivity products. For the year ended December 31, 2025, we recognized revenue of $ 38.2 million that was previously included in the beginning balance of deferred revenue. 5. Government Assistance FCC Reimbursement Program On July 15, 2022, the Company was notified that it was approved for participation in the FCC Reimbursement Program, designed to reimburse providers of advanced communications services for reasonable costs incurred in the required removal, replacement, and disposal of covered communications equipment or services from their networks that have been deemed to pose a national security risk. Pursuant to the FCC Reimbursement Program, the FCC approved up to approximately $ 334 million in reimbursements to the Company to cover documented and approved costs to (i) remove and securely destroy all ZTE communications equipment and services in the Company’s terrestrial U.S. networks and replace such equipment and (ii) remove and replace certain equipment installed on aircraft operated by the Company’s ATG customers that is not compatible with the terrestrial equipment that will replace ZTE equipment. Due to an initial shortfall in the amount appropriated by Congress to fund the FCC Reimbursement 77 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) Program, approximately $ 132 million of the approved amount was initially allocated to the Company under the program. Following passage of the Fiscal Year 2025 National Defense Authorization Act (the “FY 2025 NDAA”), the Company was allocated its full approved amount of approximately $ 334 million. and the program completion deadline was extended to May 8, 2026. Program participants are subject to a number of conditions and requirements under the FCC’s rules including a requirement that they submit their first reimbursement request by the initial July 2023 deadline and certify that they have developed a plan to permanently remove, replace and dispose of covered equipment or services within one year following the first reimbursement request. The rules permit participants to petition the FCC for one or more six-month extensions of the completion deadline. The Company, with the assistance of an advisor engaged by the Company to help administer the program, timely submitted its first reimbursement request and received its first disbursement of funds in July 2023, establishing a one year deadline for Gogo to complete the program. Due to a number of factors, including supply chain disruptions, the insufficiency of FCC funding prior to the passage of the FY 2025 NDAA, and the operational and logistical complexity of replacing airborne equipment, the Company was unable to meet this original deadline, and has sought and has been granted two six-month extensions by the FCC. Following an initial draw down disbursement from the funding authorized by the FY 2025 NDAA, the FCC established a program-wide completion deadline of May 8, 2026 for all Priority 1 participants, which includes the Company. The Company expects to require additional extensions past that date. As of December 31, 2025 and 2024, we have recorded a $ 27.8 million and $ 9.7 million receivable from the FCC, respectively, which is included in Prepaid expenses and other current assets in our Consolidated Balance Sheets. See Note 1, “Summary of Significant Accounting Policies,” for additional information on our accounting policy for government grants. The following are the deductions to the carrying value of asset balances in our Consolidated Balance Sheets as of December 31, 2025 and 2024 (in thousands): As of December 31, 2025 2024 Assets: Inventories $ ( 1,380 ) $ ( 4,560 ) Prepaid expenses and other current assets ( 7,349 ) ( 4,420 ) Property and equipment, net ( 48,001 ) ( 5,921 ) Intangible assets, net ( 2,200 ) ( 298 ) Other non-current assets ( 21,376 ) ( 11,852 ) Operating lease right-of-use assets ( 2,712 ) — The following are the increases to Net income in our Consolidated Statements of Operations for the years ended December 31, 2025 and 2024 (in thousands) : For the Year ended December 31, 2025 2024 2023 Revenue: Service revenue $ 7,663 $ 3,428 $ 825 Operating expenses: Cost of service revenue 1,617 624 720 Cost of equipment revenue 7,062 13,603 3,931 Engineering, design and development 272 144 — General and administrative 920 296 257 Depreciation and amortization 24 — — 6. Composition of Certain Balance Sheet Accounts Inventories as of December 31, 2025 and 2024 were as follows ( in thousands ): December 31, 2025 2024 Work-in-process component parts $ 41,713 $ 53,633 Finished goods 57,140 44,301 Total inventory (1) $ 98,853 $ 97,934 (1) See Note 5, “Government Assistance,” for additional information. 78 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) Prepaid expenses and other current assets as of December 31, 2025 and 2024 were as follows ( in thousands ): December 31, 2025 2024 FCC reimbursement receivable (1) $ 27,769 $ 9,732 Contract assets (1) 10,092 7,609 Interest rate caps and receivable 3,365 9,519 Prepaid inventories 2,545 3,512 Tax indemnification receivable (2) 629 5,044 Other 24,639 19,840 Total prepaid expenses and other current assets $ 69,039 $ 55,256 (1) See Note 5, “Government Assistance,” for additional information. (2) See Note 17, “Commitments and Contingencies,” for additional information. Property and equipment as of December 31, 2025 and 2024 were as follows ( in thousands ): December 31, 2025 2024 Office equipment, furniture, fixtures and other $ 59,391 $ 41,731 Leasehold improvements 16,855 16,193 Land and buildings — 6,540 Network equipment (1) 193,222 189,198 269,468 253,662 Accumulated depreciation ( 152,194 ) ( 134,537 ) Property and equipment, net $ 117,274 $ 119,125 (1) See Note 5, “Government Assistance,” for additional information. Other non-current assets as of December 31, 2025 and 2024 were as follows ( in thousands ): December 31, 2025 2024 Contract assets, net of allowances of $ 538 and $ 861 , respectively (1) $ 29,500 $ 17,422 Interest rate caps 1,108 6,660 Revolving credit facility deferred financing costs 1,584 2,344 Other 12,736 10,444 Total other non-current assets $ 44,928 $ 36,870 (1) See Note 5, “Government Assistance,” for additional information. Accrued liabilities as of December 31, 2025 and 2024 were as follows ( in thousands ): December 31, 2025 2024 Earnout liability $ 38,900 $ — Employee compensation and benefits 28,174 20,669 Operating leases 13,850 12,676 Customer credit reserve 14,647 9,935 Accrued inventory 8,845 5,101 Network equipment 1,127 4,437 Warranty reserve 5,720 4,100 Taxes 5,437 8,966 Accrued interest 132 2,184 Other 22,188 13,821 Total accrued liabilities $ 139,020 $ 81,889 79 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) Asset retirement obligations are included in Other non-current liabilities in our consolidated balance sheets and changes for the years ended December 31, 2025 and 2024 consist of the following ( in thousands ): Asset Retirement Obligation Balance – January 1, 2024 $ 6,649 Liabilities incurred 197 Liabilities settled ( 8 ) Accretion expense 641 Foreign exchange rate adjustments ( 35 ) Balance – December 31, 2024 7,444 Liabilities incurred — Liabilities settled ( 119 ) Accretion expense 714 Foreign exchange rate adjustments 30 Balance – December 31, 2025 $ 8,069 7. Composition of Certain Reserves and Allowances Credit Losses — Changes in our allowances for credit losses for the years ended December 31, 2025 and 2024 were as follows ( in thousands ): Other Accounts Non-Current Accrued Receivable Assets Liabilities Balance at January 1, 2024 $ 2,091 $ 591 $ — Additions from acquisition 1,712 — Provision for expected credit losses 1,533 270 2,000 Write-offs charged against the allowances ( 1,234 ) — — Other 365 — — Balance at December 31, 2024 4,467 861 2,000 Provision for expected credit losses 3,827 ( 323 ) ( 2,000 ) Write-offs charged against the allowances ( 1,721 ) — — Other 210 — — Balance at December 31, 2025 $ 6,783 $ 538 $ — Warranties — Changes in our warranty reserve for the years ended December 31, 2025 and 2024 were as follows ( in thousands ): Warranty Reserve Balance – January 1, 2024 $ 3,420 Additions from acquisition 430 Accruals for warranties issued 2,804 Settlements and adjustments to warranties ( 2,554 ) Balance – December 31, 2024 4,100 Accruals for warranties issued 4,773 Settlements and adjustments to warranties ( 3,153 ) Balance – December 31, 2025 $ 5,720 8. Goodwill and Other Intangible Assets Our intangible assets are comprised of both indefinite-lived and finite-lived intangible assets and goodwill. We own the rights to ATG spectrum in the nationwide 800 MHz Commercial Air-Ground Radiotelephone band (the “FCC Licenses”), which are used in 80 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) the operation of our ATG network. The FCC Licenses were originally issued with 10-year terms and we have renewed the licenses for subsequent 10-year terms. Such licenses are subject to further renewal by the FCC, and renewals of licenses held by others have occurred routinely and at nominal cost. Moreover, we have determined that there are currently no legal, regulatory, contractual, competitive, economic, or other factors that limit the useful life of the FCC Licenses. As a result, the FCC Licenses are treated as indefinite-lived intangible assets which we do not amortize. We reevaluate the useful life of the FCC Licenses each year to determine whether events and circumstances continue to support an indefinite useful life. Our annual impairment assessment of the FCC Licenses for 2025, 2024 and 2023 indicated no impairment. Our software relates to the development of internal use software which is used to run our network and support our service offerings. Software also includes software embedded in the equipment that we sell to our customers. Changes in the carrying value of goodwill during the years ended December 31, 2025 and 2024 were as follows ( in thousands ): Total Balance at January 1, 2024 $ 620 Activity in 2024 Acquisitions 184,211 Balance at December 31, 2024 184,831 Activity in 2025 Measurement period adjustments 8,356 Balance at December 31, 2025 $ 193,187 Refer to Note 2, “Acquisition of Satcom Direct,” for further information on the acquisition-related goodwill balance and measurement period adjustments. Our intangible assets, other than goodwill, as of December 31, 2025 and 2024 were as follows ( in thousands ): As of December 31, 2025 As of December 31, 2024 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Amortized intangible assets (1) : Software $ 141,942 $ ( 55,524 ) $ 86,418 $ 132,673 $ ( 47,225 ) $ 85,448 Service customer relationships 152,681 ( 39,410 ) 113,271 152,681 ( 10,491 ) 142,190 OEM and dealer relationships 17,024 ( 8,119 ) 8,905 17,024 ( 6,831 ) 10,193 Other 10,373 ( 1,468 ) 8,905 5,270 ( 53 ) 5,217 Total amortized intangible assets 322,020 ( 104,521 ) 217,499 307,648 ( 64,600 ) 243,048 Unamortized intangible assets: FCC Licenses 31,319 — 31,319 32,283 — 32,283 Total intangible assets $ 353,339 $ ( 104,521 ) $ 248,818 $ 339,931 $ ( 64,600 ) $ 275,331 (1) See Note 5, “Government Assistance,” for additional information . Amortization expense for the years ended December 31, 2025, 2024 and 2023 was $ 39.9 million , $ 3.9 million and $ 2.0 million , respectively. Amortization expense for each of the next five years and thereafter is estimated to be as follows ( in thousands ): Amortization Years ending December 31, Expense 2026 $ 42,728 2027 $ 43,600 2028 $ 43,585 2029 $ 40,916 2030 $ 13,737 Thereafter $ 32,933 Actual future amortization expense could differ from the estimated amount as the result of future investments and other factors. 9. Long-Term Debt and Other Liabilities 81 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) Long-term debt as of December 31, 2025 and 2024 was as follows ( in thousands ): December 31, December 31, 2025 2024 2021 Term Loan Facility $ 600,225 $ 599,776 HPS Term Loan Facility 243,273 244,469 Less: deferred financing costs ( 7,419 ) ( 10,164 ) Less: current portion of long-term debt ( 2,500 ) ( 2,500 ) Total long-term debt $ 833,579 $ 831,581 2021 Credit Agreement On April 30, 2021, Gogo and Gogo Intermediate Holdings LLC (“GIH”) (a wholly owned subsidiary of Gogo) entered into a credit agreement (the “Original 2021 Credit Agreement,” and, as it may be amended, supplemented or otherwise modified from time to time , the “2021 Credit Agreement”) among Gogo, GIH, the lenders and issuing banks party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, which provides for (i) a term loan credit facility (the “2021 Term Loan Facility”) in an aggregate principal amount of $ 725.0 million, issued with a discount of 0.5 %, and (ii) a revolving credit facility (the “Revolving Facility” and together with the 2021 Term Loan Facility, the “2021 Facilities”) of up to $ 100.0 million, which includes a letter of credit sub-facility. The 2021 Term Loan Facility matures on April 30, 2028. On December 3, 2024, Gogo and GIH entered into a second amendment to the 2021 Credit Agreement, by and among, Gogo, GIH, guarantors party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent, and the lenders party thereto, among other purposes, (a) increase the aggregate principal amount of revolving commitments available under the 2021 Credit Agreement to an aggregate amount of revolving commitments equal to $ 122 million and (b) extend the maturity date of the revolving facility to December 3, 2029 (subject to such maturity date springing to the date that is 90 days prior to the then-current maturity date of (a) the 2021 Term Loan Facility under the 2021 Credit Agreement and (b) the HPS Term Loan Facility under the HPS Credit Agreement under certain conditions). The 2021 Term Loan Facility amortizes in quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity of the 2021 Term Loan Facility. There are no amortization payments under the Revolving Facility. The 2021 Term Loan Facility bears annual interest at a floating rate measured by reference to, at GIH’s option, either (i) an adjusted term secured overnight financing rate as administered by the Federal Reserve Bank of New York (“SOFR”) (subject to a floor of 0.75 %) plus an applicable margin of 3.75 % and a credit spread adjustment of approximately 0.11%, 0.26% or 0.43% per annum based on 1-month, 3-month or 6-month term SOFR, respectively or (ii) an alternate base rate plus an applicable margin of 2.75 %. Loans outstanding under the Revolving Facility bear annual interest at a floating rate measured by reference to, at GIH’s option, either (i) an adjusted term SOFR rate (subject to a floor of 0.00 %) plus an applicable margin ranging from 3.50 % to 4.00 % per annum depending on GIH’s senior secured first lien net leverage ratio or (ii) an alternate base rate plus an applicable margin ranging from 2.50 % to 3.00 % per annum depending on GIH’s senior secured first lien net leverage ratio. Additionally, unused commitments under the Revolving Facility are subject to a fee ranging from 0.25 % to 0.50 % per annum depending on GIH’s senior secured first lien net leverage ratio. As of December 31, 2025 , the fee for unused commitments under the Revolving Facility was 0.25 % and the applicable margin was 4.00 % for SOFR rate loans and 3.00 % for alternate rate loans. The 2021 Facilities may be prepaid at GIH’s option at any time without premium or penalty (other than customary breakage costs), subject to minimum principal payment amount requirements. On May 3, 2023, the Company prepaid $ 100 million of the outstanding principal amount of the 2021 Term Loan Facility. As a result, we wrote off $ 2.2 million of the deferred financing costs and unaccreted debt discount, which are included in Loss on extinguishment of debt in our Consolidated Statements of Operations for the year ended December 31, 2023. This prepayment satisfied the required amortization payments for the remaining term of the 2021 Term Loan Facility. Subject to certain exceptions and de minimis thresholds, the 2021 Term Loan Facility is subject to mandatory prepayments in an amount equal to: • 100 % of the net cash proceeds of certain asset sales, insurance recovery and condemnation events, subject to reduction to 50 % and 0 % if specified senior secured first lien net leverage ratio targets are met; • 100 % of the net cash proceeds of certain debt offerings; and • 50 % of annual excess cash flow (as defined in the 2021 Credit Agreement), subject to reduction to 25 % and 0 % if specified senior secured first lien net leverage ratio targets are met. 82 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) The 2021 Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants include restrictions on, among other things: incurrence of indebtedness or issuance of disqualified equity interests; incurrence or existence of liens; consolidations or mergers; activities of Gogo and any subsidiary holding a license issued by the FCC; investments, loans, advances, guarantees or acquisitions; asset sales; dividends or other distributions on equity; purchase, redemption or retirement of capital stock; payment or redemption of certain junior indebtedness; entry into other agreements that restrict the ability to incur liens securing the 2021 Facilities; and amendment of organizational documents; in each case subject to customary exceptions. The Revolving Facility includes a financial covenant set at a maximum senior secured first lien net leverage ratio of 7.50 :1.00, which will apply if the outstanding amount of loans and unreimbursed letter of credit drawings thereunder at the end of any fiscal quarter exceeds 35 % of the aggregate of all commitments thereunder. The 2021 Credit Agreement contains customary events of default, which, if any of them occurred, would permit or require the principal, premium, if any, and interest on all of the then outstanding obligations under the 2021 Facilities to be due and payable immediately and the commitments under the Revolving Facility to be terminated. The Revolving Facility is available for working capital and general corporate purposes of GIH and its subsidiaries and was undrawn as of December 31, 2025 and 2024. As of December 31, 2025 and 2024, the outstanding principal amount of the 2021 Term Loan Facility was $ 601.4 million and $ 601.4 million, respectively, the unaccreted debt discount was $ 1.2 million and $ 1.7 million, respectively, and the net carrying amount was $ 600.2 million and $ 599.8 million, respectively. We paid approximately $ 21.6 million of loan origination and financing costs related to the 2021 Facilities, which are being accounted for as deferred financing costs on our consolidated balance sheets and are amortized over the terms of the 2021 Facilities. Total amortization expense was $ 2.9 million , $ 2.5 million and $ 2.4 million, respectively, for the years ended December 31, 2025, 2024 and 2023 and is included in interest expense in our consolidated statements of operations. As of December 31, 2025 and 2024, the balance of unamortized deferred financing costs related to the 2021 Facilities was $ 7.4 million and $ 10.4 million, respectively. On April 30, 2021, Gogo, GIH, and each direct and indirect wholly-owned U.S. restricted subsidiary of GIH (Gogo and such subsidiaries collectively, the “Guarantors”) entered into a guarantee agreement (the “Guarantee Agreement”) in favor of Morgan Stanley Senior Funding, Inc., as collateral agent (the “Collateral Agent”), whereby GIH and the Guarantors guarantee the obligations under the 2021 Facilities and certain other secured obligations as set forth in the Guarantee Agreement, and GIH and the Guarantors entered into a collateral agreement (the “Collateral Agreement”), in favor of the Collateral Agent, whereby GIH and the Guarantors grant a security interest in substantially all of their respective tangible and intangible assets (including the equity interests in each direct material wholly-owned U.S. restricted subsidiary owned by GIH or any Guarantor, and 65% of the equity interests in any non-U.S. subsidiary held directly by GIH or any Guarantor), subject to certain exceptions, to secure the obligations under the 2021 Facilities and certain other secured obligations as set forth in the Collateral Agreement. The liens granted under the 2021 Term Loan Facility are subject to an intercreditor agreement and are pari passu with the liens granted under the HPS Term Loan Facility (as defined below). HPS Credit Agreement On December 3, 2024, the Company and GIH entered into a credit agreement (the “HPS Credit Agreement” and together with the 2021 Credit Agreement, the “Credit Agreements”) with HPS Investment Partners, LLC, as the administrative agent, and the lenders party thereto, which provides for a term loan credit facility (the “HPS Term Loan Facility”) in an aggregate principal amount of $ 250 million. The HPS Term Loan Facility amortizes in quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity of the HPS Term Loan Facility on April 30, 2028. The HPS Term Loan Facility bears annual interest at a floating rate measured by reference to, at the Company’s option, either (i) an adjusted term SOFR (subject to a floor of 1.00 %) plus an initial applicable margin of 6.00 %, which is subject to two leverage-based step-downs of up to 0.25 % each or (ii) an alternate base rate plus an applicable margin of 5.00 %, which is subject to two leverage-based step-downs of up to 0.25 % each. The HPS Term Loan Facility may be prepaid at the Company’s option, at any time, without premium or penalty (other than customary breakage costs, and except that (a) during the first 12 months following the closing of the HPS Credit Agreement, certain prepayments of the HPS Term Loan Facility are subject to a 3.00% prepayment premium and (b) during the period from 12 months to 24 months following the closing of the HPS Credit Agreement, certain prepayments of the HPS Term Loan Facility are subject to a 1.00% prepayment premium), subject to minimum principal repayment amount requirements. Subject to certain exceptions and de minimis thresholds, the HPS Term Loan Facility is subject to mandatory prepayments in an amount equal to: 83 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) • 100 % of the net cash proceeds of certain asset sales, insurance recovery and condemnation events; • 100 % of the net cash proceeds of certain debt offerings; and • 75 % of annual excess cash flow (as defined in the HPS Credit Agreement), subject to reduction to 50 % if specified senior secured first lien net leverage ratio targets are met. The HPS Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants include restrictions on, among other things: the incurrence of indebtedness or issuance of disqualified equity interests; the incurrence or existence of liens; consolidations or mergers; activities of the Company; the making of investments, loans, advances, guarantees or acquisitions; asset sales; the making of dividends or other distributions on equity; the purchase, redemption or retirement of capital stock; payment or redemption of certain junior indebtedness; activities of Federal Communications Commission license holders; entry into other agreements that restrict the ability to incur liens securing the HPS Term Loan Facility. The HPS Credit Agreement contains customary events of default, which, if any of them occurred, would permit or require the principal, premium, if any, and interest on all of the then outstanding obligations under the HPS Term Loan Facility to be due and payable immediately. As of December 31, 2025 and 2024, the outstanding principal amount of the HPS Term Loan Facility was $ 246.9 million and $ 249.4 million, respectively, the unaccreted debt discount was $ 3.6 million and $ 4.9 million, respectively, and the net carrying amount was $ 243.3 million $ 244.5 million, respectively. We paid approximately $ 2.2 million of loan origination and financing costs related to the HPS Credit Agreement which are being accounted for as deferred financing costs on our consolidated balance sheets and are amortized over the term of the HPS Credit Agreement. Total amortization expense was $ 0.6 million and less than $ 0.1 million, respectively, for the years ended December 31, 2025 and 2024 and is included in interest expense in our consolidated statements of operations. As of December 31, 2025 and 2024, the balance of unamortized deferred financing costs related to the HPS Credit Agreement was $ 1.6 million and $ 2.1 million, respectively. On December 3, 2024, Gogo, GIH, and the Guarantors entered into a guarantee agreement (the “HPS Guarantee Agreement”) in favor of HPS Investment Partners, LLC, as collateral agent (the “HPS Collateral Agent”), whereby GIH and the Guarantors guarantee the obligations under the HPS Term Loan Facility and certain other secured obligations as set forth in the HPS Guarantee Agreement, and GIH and the Guarantors entered into a collateral agreement (the “HPS Collateral Agreement”), in favor of the Collateral Agent, whereby GIH and the Guarantors grant a security interest in substantially all of their respective tangible and intangible assets (including the equity interests in each direct material wholly-owned U.S. restricted subsidiary owned by GIH or any Guarantor, and 65% of the equity interests in any non-U.S. subsidiary held directly by GIH or any Guarantor), subject to certain exceptions, to secure the obligations under the HPS Term Loan Facility and certain other secured obligations as set forth in the HPS Collateral Agreement. The liens granted under the HPS Term Loan Facility are subject to an intercreditor agreement and are pari passu with the liens granted under the 2021 Term Loan Facility. 10. Derivative Instruments and Hedging Activities We are exposed to interest rate risk on our variable rate borrowings. We currently use interest rate caps to manage our exposure to interest rate changes, and have designated these interest rate caps as cash flow hedges for accounting purposes. Accordingly, the earnings impact of the derivatives designated as cash flow hedges is recorded upon the recognition of the variable interest payments related to the hedged debt. In May 2021, we purchased interest rate caps with an aggregate notional amount of $ 650.0 million for $ 8.6 million. The cost of the interest rate caps will be amortized to interest expense using the caplet method, from the effective date through termination date. We receive payments in the amount calculated pursuant to the caps for any period in which the daily compounded SOFR rate plus a credit spread adjustment recommended by the Alternative Reference Rate Committee of 0.26% increases beyond the applicable strike rate . The notional amounts of the interest rate caps periodically decrease over the life of the caps. The notional amounts, strike rates and end dates of the cap agreements are as follows (notional amounts in thousands) : Start Date End Date Notional Amounts Strike Rate 7/31/2021 7/30/2023 $ 650,000 0.75 % 7/31/2023 7/30/2024 525,000 0.75 % 7/31/2024 7/30/2025 350,000 1.25 % 7/31/2025 7/30/2026 250,000 2.25 % 7/31/2026 7/30/2027 200,000 2.75 % We record the effective portion of changes in the fair value of our cash flow hedges to other comprehensive income (loss), net of tax, and subsequently reclassify these amounts into earnings in the period during which the hedged transaction is recognized. The 84 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) amounts included in accumulated other comprehensive income will be reclassified to interest expense in the event the hedges are no longer considered effective, in accordance with ASC 815, Derivatives and Hedging . During the year ended December 31, 2023, fully offsetting unrealized gains and losses were incurred from our cash flow hedges that were considered ineffective as a result of a voluntary partial de-designation of the hedge relationship related to a prepayment of our existing variable-rate debt discussed in Note 9, “Long-Term Debt and Other Liabilities.” No gains or losses of our cash flow hedges were considered to be ineffective and reclassified from other comprehensive income (loss) to earnings for the years ended December 31, 2025 and 2024 . We estimate that approximately $ 1.4 million currently recorded in accumulated other comprehensive income (loss) will be recognized in earnings over the next 12 months. We assess the effectiveness of the hedges on an ongoing basis, and the remaining outstanding caps are still considered to be highly effective, and remain designated as a cash flow hedge. Cash flows from interest rate caps are classified in the consolidated statements of cash flows as investing activities. For the year ended December 31, 2025, we recorded a decrease in fair value on the interest rate caps of $ 8.3 million, net of tax of $ 2.1 million. For the year ended December 31, 2024, we recorded a decrease in fair value on the interest rate caps of $ 12.0 million, net of tax of $ 3.0 million. Increases and decreases in fair value on interest rate caps above exclude amortization of the purchase price paid for the interest rate caps. When derivatives are used, we are exposed to credit loss in the event of non-performance by the counterparties; however, non-performance is not anticipated. ASC 815, Derivatives and Hedging , requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the balance sheet. The fair values of the interest rate derivatives are based on quoted market prices for similar instruments from commercial banks (based on significant observable inputs - Level 2 inputs). The following table presents the fair value of our interest rate derivatives included in the consolidated balance sheets for the periods presented (in thousands): December 31, Derivatives designated as hedging instruments Balance sheet location 2025 2024 Current portion of interest rate caps Prepaid expenses and other current assets $ 2,568 $ 7,351 Non-current portion of interest rate caps Other non-current assets $ 1,108 $ 6,660 Fair Value Measurement Our derivative assets and liabilities consist principally of interest rate caps, which are carried at fair value based on significant observable inputs (Level 2 inputs). Derivatives entered into by us are typically executed over-the-counter and are valued using discounted cash flows along with fair value models that primarily use market observable inputs. These models take into account a variety of factors including, where applicable, maturity, interest rate yield curves, and counterparty credit risks. 11. Interest Costs We capitalize a portion of our interest on funds borrowed during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying assets and amortized over the useful lives of the assets. The following is a summary of our interest costs for the years ended December 31, 2025, 2024 and 2023 (in thousands) : For the Years Ended December 31, 2025 2024 2023 Interest costs charged to expense $ 70,146 $ 53,697 $ 55,823 Amortization of deferred financing costs 3,492 2,508 2,385 Accretion of debt discount 1,752 510 403 Amortization of the purchase price of interest rate caps 2,026 2,639 1,509 Interest rate cap benefit ( 9,199 ) ( 20,923 ) ( 27,064 ) Interest expense 68,217 38,431 33,056 Interest costs capitalized to property and equipment 3,886 2,787 2,156 Interest costs capitalized to software 1,760 1,398 768 Total interest costs $ 73,863 $ 42,616 $ 35,980 12. Fair Value of Financial Assets and Liabilities Refer to Note 2, “Acquisition of Satcom Direct,” for fair value information relating to the Satcom Direct acquisition. Refer to Note 10, “Derivative Instruments and Hedging Activities,” for fair value information relating to our interest rate caps. 85 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) Investment in Convertible Note: On February 26, 2024, Gogo invested $ 5 million in a convertible note offering (“Investment in Convertible Note”). The Investment in Convertible Note accrues interest at 5 % per annum, payable upon maturity of the note or upon conversion, and matures two years after the date of issuance. We have elected to measure our Investment in Convertible Note using the fair value option and record changes in fair value, including accrued interest, in Other (income) expense, net on the Consolidated Statements of Operations. The Company elected the fair value option for the Investment in Convertible Note to eliminate complexities of applying certain accounting models. The reconciliation of beginning and ending balances of the Investment in Convertible Note as of December 31, 2025 were as follows (in thousands) : Investment in Convertible Note Balance at January 1, 2024 $ — Investment 5,000 Change in fair value ( 793 ) Balance at December 31, 2024 4,207 Change in fair value ( 3,552 ) Balance at December 31, 2025 $ 655 Long-Term Debt: As of December 31, 2025 and 2024, our only financial assets and liabilities disclosed but not measured at fair value are the 2021 Term Loan Facility and the HPS Term Loan Facility, which are reflected on the consolidated balance sheets at cost. The fair value measurements are classified as Level 2 within the fair value hierarchy since they are based on quoted market prices of our instruments in markets that are not active. We estimated the fair values of the 2021 Term Loan Facility and the HPS Term Loan Facility by calculating the upfront cash payments a market participant would require to assume these obligations. The upfront cash payments used in the calculations of fair values on our consolidated balance sheets, excluding any issuance costs, are the amounts that a market participant would be willing to lend at such date to an entity with a credit rating similar to ours and that would allow such an entity to achieve sufficient cash inflows to cover the scheduled cash outflows under the 2021 Term Loan Facility and HPS Term Loan Facility. The fair value and carrying value of long-term debt as of December 31, 2025 and 2024 was as follows (in thousands) : December 31, 2025 December 31, 2024 Fair Value (1) Carrying Value Fair Value (1) Carrying Value 2021 Term Loan Facility $ 550,000 $ 600,225 (2) $ 572,000 $ 599,776 (2) HPS Term Loan Facility $ 238,000 $ 243,273 (3) $ 244,000 $ 244,469 (3) (1) Fair value amounts are rounded to the nearest million. (2) Carrying value of the 2021 Term Loan Facility reflects the unaccreted debt discount of $ 1.2 million and $ 1.7 million, respectively, as of December 31, 2025 and 2024. See Note 9, “Long-Term Debt and Other Liabilities,” for further information. (3) Carrying value of the HPS Term Loan Facility reflects the unaccreted debt discount of $ 3.6 million and $ 4.9 million, respectively, as of December 31, 2025 and 2024. See Note 9, “Long-Term Debt and Other Liabilities,” for further information. 13. Business Segment The accounting policies of the operating segments are the same as those described in Note 1, “Summary of Significant Accounting Policies.” Intercompany transactions between segments are excluded as they are not included in management’s performance review of the segments. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer (“CEO”). The CODM makes resource and operating decisions by evaluating performance and business results of the consolidated company. As a result, the Company has a single reportable segment, with net income (loss) utilized as the performance measure. Information regarding consolidated revenues by geographic area is as follows (in thousands) : 86 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) For the Years Ended December 31, 2025 2024 2023 United States $ 671,253 $ 397,375 $ 372,246 International 239,238 47,334 25,331 Total $ 910,491 $ 444,709 $ 397,577 Information regarding consolidated long-lived assets by geographic area, which consist of property and equipment, net and operating lease right-of-use assets is as follows (in thousands) : As of December 31, 2025 2024 United States $ 155,714 $ 166,518 International 19,550 21,072 Total $ 175,264 $ 187,590 No customer accounted for more than 10 % of total revenue for the years ended December 31, 2025, 2024 and 2023 and no customer accounted for more than 10 % of accounts receivable as of December 31, 2025 or 2024 . 14. Stock-Based Compensation and Retirement Plans As of December 31, 2025, we maintained the 2024 Omnibus Equity Incentive Plan (the “2024 Plan”), which replaced the Second Amended and Restated Gogo Inc. 2016 Omnibus Incentive Plan (the “2016 Plan”). The 2024 Plan provides for the grant of both equity and cash awards, including non-qualified stock options, incentive stock options, stock appreciation rights, performance awards (shares and units), restricted stock, RSUs, deferred share units (“DSUs”) and other stock-based awards and dividend equivalents to eligible employees, directors and consultants, as determined by the Compensation Committee of our Board of Directors (the “Compensation Committee”). Concurrent with the effectiveness of the 2024 Plan on June 4, 2024, no further grants are being made under the 2016 Plan. The 2016 Plan remains in effect for all awards outstanding thereunder on or after June 4, 2024. The majority of our equity grants are awarded on an annual basis. Additionally, in connection with the Company’s acquisition of Satcom Direct on December 3, 2024, 2,275,000 shares were granted, consisting of a combination of RSUs and performance-based restricted stock units (“PSUs”) (together, the “Inducement Awards”) by the Compensation Committee to certain executives of the Company. The RSUs will vest in equal annual installments over the five-year period following the grant date. The PSUs are subject to performance-based vesting and will vest when the performance-based vesting conditions are met. Though not awarded pursuant to the 2024 Plan, the Inducement Awards have been issued subject to the terms and conditions of the 2024 Plan. Upon effectiveness of the 2024 Plan on June 4, 2024 , 6,940,644 shares of common stock were reserved for issuance. As of December 31, 2025 , 3,429,888 shares remained available for grant under the 2024 Plan. The contractual life of granted options is 10 years . Except as otherwise approved by the Compensation Committee, all options that are unvested as of the date on which a recipient’s employment terminates, as well as vested options that are not exercised within a prescribed period following termination, are forfeited and become available for future grants. We grant RSUs, which generally vest in equal annual increments over a four-year period. Vested RSUs will be settled, at the discretion of the Compensation Committee, in shares of our common stock or in cash equal to the value of the applicable number of shares of our common stock on the vesting date. We also grant DSUs to directors, some of which vest on the grant date and others on the first anniversary of the grant date. DSUs will be settled in shares of our common stock after the director ceases to serve as a director. We intend to settle RSU and DSU awards in stock. The following is a summary of our stock-based compensation expense included in the consolidated statements of operations, for the years December 31, 2025, 2024 and 2023 (in thousands) : For the Years Ended December 31, 2025 2024 2023 Cost of service revenue $ 1,707 $ 1,927 $ 1,701 Cost of equipment revenue 1,048 1,535 1,363 Engineering, design and development 3,369 4,064 3,569 Sales and marketing 2,865 4,010 3,678 General and administrative 15,083 9,241 10,977 Total stock-based compensation expense $ 24,072 $ 20,777 $ 21,288 87 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) A summary of stock option activity for the year ended December 31, 2025 is as follows: Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands) Options outstanding – January 1, 2025 3,468,716 $ 4.22 2.97 $ 15,134 Granted — $ — Exercised ( 1,523,441 ) $ 3.23 Forfeited — $ — Expired ( 82,171 ) $ 17.93 Options outstanding – December 31, 2025 1,863,104 $ 4.42 3.52 $ 2,620 Options exercisable – December 31, 2025 1,863,104 $ 4.42 3.52 $ 2,620 The total grant date fair value of stock options vested in 2024 and 2023 was approximately $ 0.1 million and $ 0.3 million, respectively. The following table summarizes the activities for our unvested RSUs, PSUs and DSUs for the year ended December 31, 2025: Number of Underlying Shares Weighted Average Grant Date Fair Value Unvested – January 1, 2025 6,119,261 $ 10.13 Granted 3,125,746 $ 9.78 Vested ( 2,533,637 ) $ 10.53 Forfeited/canceled ( 652,344 ) $ 10.52 Unvested – December 31, 2025 6,059,026 $ 9.72 As of December 31, 2025, there was approximately $ 46 million of unrecognized compensation cost related to unvested employee RSUs and PSUs. This amount is expected to be recognized over a weighted-average period of approximately 2.8 years. The total grant date fair value of RSUs and DSUs vested in 2025 was approximately $ 27 million . In connection with the acquisition of Satcom Direct discussed in Note 2, “Acquisition of Satcom Direct,” the Company issued PSUs to certain executives that vest upon the achievement of pre-established metrics tied to the price of the Company’s common stock. The PSUs have an indefinite contractual life and are expensed over the estimated expected life of the award. We estimated the fair value of PSUs using a Monte Carlo simulation. The significant assumptions used in the Monte Carlo simulation were as follows: For the Years Ended December 31, 2024 Approximate risk-free interest rate 4.4 % Average expected life (years) 3.21 Dividend yield N/A Volatility 67.2 % Weighted average grant date fair value of PSUs granted $ 7.91 The risk-free interest rate assumption was based on the U.S. Treasury yield curve for the term that mirrored the Monte Carlo simulation term. The expected life of the PSUs represents the derived service period that is inferred from the median of the distribution of share price paths on which the PSU conditions are satisfied. The dividend yield was based on expected dividends at the time of grant. Volatility was calculated using the historical volatility of the Company’s common stock. ESPP - In 2024, the Board of Directors and stockholders approved the 2024 Employee Stock Purchase Plan (the “ESPP”), which became effective June 4, 2024. The prior ESPP expired during 2023. The ESPP allows eligible employees to purchase a limited number of shares of common stock during pre-specified offering periods at a discount established by the Compensation Committee which may not exceed 15 % of the fair market value of the common stock at the beginning or end of the offering period (whichever was lower). Under the ESPP, 700,000 shares were reserved for issua nce and 110,337 shares of common stock were issued during the year ended December 31, 2025. As of December 31, 2025 , 552,959 sh ares remained available for purchase under the ESPP. Retirement Plans - We have a 401(k) plan for U.S.-based employees, as well as various defined contribution plans for international employees. Under our 401(k) plan, all employees who are eligible to participate are entitled to make tax-deferred 88 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) contributions, subject to Internal Revenue Service limitations. We match 100 % of the employee’s first 4 % of 401(k) contributions made, subject to annual limitations. Our matching contributions for all plans were $ 4.1 million , $ 2.8 million, and $ 2.3 million for the years ended December 31, 2025, 2024 and 2023 , respectively. 15. Income Tax For financial reporting purposes, the income before income taxes included the following components for the years ended December 31, 2025, 2024, and 2023 ( in thousands ): For the Years Ended December 31, 2025 2024 2023 United States $ 29,495 $ 20,239 $ 97,212 Foreign ( 2,683 ) ( 2,105 ) 391 Income before income taxes $ 26,812 $ 18,134 $ 97,603 Significant components of the provision (benefit) for income taxes for the years ended December 31, 2025, 2024, and 2023 are as follows ( in thousands ): For the Years Ended December 31, 2025 2024 2023 Current: Federal $ 176 $ — $ — State 2,628 1,137 1,097 Foreign 1,128 6 — 3,932 1,143 1,097 Deferred: Federal 8,966 3,533 ( 40,743 ) State 1,683 ( 9 ) ( 7,971 ) Foreign ( 692 ) ( 279 ) ( 458 ) 9,957 3,245 ( 49,172 ) Total $ 13,889 $ 4,388 $ ( 48,075 ) The provision (benefit) for income taxes differs from income taxes computed at the federal statutory tax rates for the years ended December 31, 2025, 2024, and 2023 as a result of the following items (dollars in thousands): For the Year Ended December 31, 2025 U.S. federal statutory tax rate $ 5,630 21.0 % State and local income taxes, net of federal income tax effect (1) 3,407 12.7 % Foreign tax effects 1,175 4.4 % Effect of changes in tax laws or rates enacted in the current period — — Effect of cross border tax laws Global Intangible Low-Taxed Income 1,618 6.0 % Tax credits Research and development credits ( 1,334 ) ( 5.0 )% Changes in valuation allowances ( 8,525 ) ( 31.8 )% Nontaxable or nondeductible items Nondeductible officer's compensation 2,756 10.3 % Excess tax benefits on stock-based compensation 1,229 4.6 % Foreign branch income/(loss) ( 941 ) ( 3.5 )% Other 102 0.4 % Changes in unrecognized tax benefits — — Other Capital loss expiration 8,525 31.8 % Other 247 0.9 % Income tax provision $ 13,889 51.8 % 89 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) (1) State taxes in California, Illinois and New York City made up the majority (greater than 50%) of the effect in this category. For the Years Ended December 31, 2024 2023 Federal statutory rate 21.0 % 21.0 % Effect of: Change in valuation allowance 1.2 ( 74.5 ) State income taxes-net of federal tax benefit 4.9 5.0 Research and development credits ( 12.9 ) ( 1.2 ) Nondeductible officer's compensation 6.5 1.2 Excess tax benefits on stock-based compensation 8.3 ( 0.4 ) Foreign branch income (loss) ( 2.1 ) — Basis adjustment ( 3.6 ) ( 0.3 ) Other 0.9 ( 0.1 ) Effective tax rate 24.2 % ( 49.3 )% The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025 in the following jurisdictions ( in thousands ): 2025 Federal $ — State 2,873 Foreign 527 Total income tax payments $ 3,400 State 2025 Florida $ 1,041 California 728 Other 1,104 Total state income tax payments $ 2,873 Foreign 2025 Brazil $ 388 United Kingdon 123 Other 16 Total foreign income tax payments $ 527 90 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) In addition to the Deferred income taxes on the consolidated balance sheets, the Company has a deferred tax liability of $ 1.5 million and $ 4.7 million related to foreign entities included in Other non-current liabilities as of December 31, 2025 and 2024, respectively. Components of the net deferred income tax asset as of December 31, 2025 and 2024 are as follows ( in thousands ): December 31, December 31, 2025 2024 Deferred income tax assets: Federal net operating loss (NOL) $ 54,373 $ 76,249 State NOL 18,382 20,667 Foreign NOL 15,214 11,632 Interest carryforward 68,213 70,679 Operating lease liability 17,553 19,496 Section 174 costs 10,587 18,112 Intangible assets 7,504 1,671 Other 48,509 48,372 Total deferred income tax assets 240,335 266,878 Deferred income tax liabilities: Intangible assets — ( 11,123 ) Right-of-use asset ( 14,608 ) ( 16,455 ) Interest rate cap valuation ( 337 ) ( 2,366 ) Other ( 245 ) ( 1,199 ) Total deferred income tax liabilities ( 15,190 ) ( 31,143 ) Total deferred income tax 225,145 235,735 Valuation allowance ( 16,977 ) ( 23,160 ) Net deferred income tax asset $ 208,168 $ 212,575 We regularly assess the need for a valuation allowance related to our deferred income tax assets to determine, based on the weight of all available positive and negative evidence, whether it is more likely than not that some or all of such deferred assets will not be realized. In our assessments, the Company considers recent financial operating results, the scheduled expiration of our net operating losses, future taxable income, the reversal of existing taxable differences, and tax planning strategies. Based on our most recent assessment, as of December 31, 2025 and 2024 , the Company had valuation allowances of $ 17.0 million and $ 23.2 million, respectively, against its deferred tax assets. The Company’s valuation allowance decreased by $ 6.2 million. The decrease primarily related to the expiration of an unused U.S. federal and state capital loss tax attributes, partially offset by the establishment of a valuation allowance on state net operating loss carryforwards. Management believes the remaining deferred tax assets are more likely than not to be realized based on the weight of available positive and negative evidence. The valuation allowances pertain to foreign and state net operating losses. Management believes it is more likely than not that these deferred tax assets will not be realized as of December 31, 2025. If our current operating performance continues, further reversals of our valuation allowance could occur within the next twelve months. As of December 31, 2025, the federal net operating loss (“NOL”) carryforward, state NOL carryforward and Canadian NOL carryforward were approximately $ 259 million , $ 304 million , and $ 57 million , respectively. We have recorded a deferred tax asset of $ 54.4 million , $ 18.4 million , and $ 15.2 million for federal NOLs, state NOLs, and foreign NOLs, respectively, reflecting the benefit of these loss carryforwards. The federal and state NOLs begin to expire in 2035 and 2027, respectively. The Canadian NOL carryforward begins to expire in 2034. Uncertain Tax Positions - As of December 31, 2025 and 2024, the total amount of gross unrecognized tax benefits was $ 2.0 million and $ 1.7 million, respectively. The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties for the years ended December 31, 2025 and 2024 is as follows (in thousands) : 91 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) For the Year Ended December 31, For the Year Ended December 31, 2025 2024 Beginning balances $ 1,702 $ 1,934 Increases related to tax positions taken during a prior year 69 149 Decreases related to tax positions taken during a prior year — ( 782 ) Increases related to tax positions taken during the current year 261 401 Decreases related to settlements with taxing authorities — — Decreases related to expiration of the statute of limitations — — Ending balances $ 2,032 $ 1,702 We are subject to taxation and file income tax returns in the United States federal jurisdiction, various states and several foreign jurisdictions including, but not limited to, Canada, Switzerland, United Kingdom, Australia, Brazil and Singapore. With few exceptions, as of December 31, 2025, we are no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2010. The total amount of unrecognized tax benefits that, if recognized, would reduce the Company’s effective tax rate is $ 2.0 million and $ 1.7 million as of December 31, 2025 and 2024 , respectively. We record penalties and interest relating to uncertain tax positions in the income tax provision line item in the consolidated statement of operations. No penalties or interest related to uncertain tax positions were recorded for the years ended December 31, 2025, 2024 or 2023. All undistributed earnings, to the extent there are any, will remain permanently reinvested to support existing working capital needs in the international subsidiaries. The Company has not provided for deferred taxes on outside basis differences for investments in its international subsidiaries that are unrelated to unremitted earnings as these basis differences will be indefinitely reinvested. The amount of unrecognized deferred tax liability does not have a material impact on the financial statements. 16. Leases The following is a summary of our lease expense included in the consolidated statement of operations (in thousands) : For the Years Ended December 31, 2025 2024 2023 Operating lease cost (1) $ 41,307 $ 16,692 $ 15,961 Finance lease cost: Amortization of leased assets 54 55 112 Interest on lease liabilities 9 13 9 Total lease cost $ 41,370 $ 16,760 $ 16,082 (1) Includes short-term and variable lease cost. Other information regarding our leases is as follows (in thousands, except lease terms and discount rates) : For the Years Ended December 31, 2025 2024 2023 Supplemental cash flow information Cash paid for amounts included in measurement of lease liabilities: Operating cash flows used in operating leases $ 19,419 $ 17,392 $ 16,422 Operating cash flows used in finance leases $ 9 $ 13 $ 9 Financing cash flows used in finance leases $ 41 $ 31 $ 132 Non-cash items: Operating leases obtained $ 2,718 $ 9,325 $ 5,231 Finance leases obtained $ — $ 170 $ — Weighted average remaining lease term Operating leases 5 years 6 years 7 years Finance leases 1 year 2 years 2 years Weighted average discount rate Operating leases 7.0 % 7.0 % 6.8 % Finance leases 9.1 % 9.0 % 4.7 % 92 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) Annual future minimum lease payments as of December 31, 2025 (in thousands) : Years ending December 31, Operating Leases Financing Leases 2026 $ 18,029 $ 93 2027 17,291 15 2028 14,728 — 2029 13,161 — 2030 9,277 — Thereafter 10,468 — Total future minimum lease payments 82,954 108 Less: Amount representing interest ( 13,332 ) ( 4 ) Present value of net minimum lease payments $ 69,622 $ 104 Reported as of December 31, 2025 Accrued liabilities $ 13,850 $ 89 Non-current operating lease liabilities 55,772 — Other non-current liabilities — 15 Total lease liabilities $ 69,622 $ 104 As of December 31, 2025 , there were no significant leases which had not yet commenced. 17. Commitments and Contingencies Contractual Commitments – We have agreements with various vendors under which we have remaining commitments to purchase hardware components and development services. Such commitments will become payable as we receive the hardware components or as development services are provided. On May 17, 2024, Airspan Networks Holdings Inc. (“Airspan”) filed a plan supplement to its Joint Prepackaged Chapter 11 Plan of Reorganization, Case No. 24-10621 (the “Plan”), whereby the Company and Fortress Credit Corp. (“Fortress”) agreed in principle to each provide fifty percent (50%) of a new first lien revolving facility in an aggregate committed principal amount of $ 20.0 million (the “New Revolving Credit Facility”). Over the course of the first seven months of 2025, Airspan borrowed the full amount of the New Revolving Credit Facility, of which $ 10 million was the Company’s obligation. In August 2025, the Company, Airspan and Fortress agreed to amend the New Revolving Credit Facility to remove the Company as a lender under that agreement and the outstanding amount of $ 10.0 million was repaid to the Company. The Company accrued a contingent liability of $ 0.7 million and $ 5.0 million, respectively, in Accrued liabilities in the Consolidated Balance Sheets as of December 31, 2025 and 2024 for state and local taxes in a variety of jurisdictions for periods between 2010 and 2025 r elated to Satcom Direct’s business activities. While the Company believes that the reserve represents the best current estimate of any potential liability in state and local taxes, there can be no assurance that the outcome of discussions with any state taxing authority will not result in the payment of state sales taxes for prior periods, or that the amount of any such payments will not be materially different than the liability currently recorded. Pursuant to the terms of the Purchase Agreement, the Company has accrued a $ 0.6 million and $ 5.0 million indemnification receivable, respectively, in Prepaid expenses and other current assets in the Consolidated Balance Sheets as of December 31, 2025 and 2024. See Note 2, “Acquisition of Satcom Direct,” for further information on the Purchase Agreement. SmartSky Litigation – On February 28, 2022 , SmartSky Networks, LLC (“SmartSky”) brought suit against Gogo Inc. and its subsidiary Gogo Business Aviation LLC in the U.S. District Court for the District of Delaware (the “Court”) alleging that Gogo 5G infringes four patents owned by the plaintiff. On February 21, 2023, the plaintiff amended its complaint to allege that Gogo 5G infringes two additional patents that had been recently issued to the plaintiff. The suit seeks compensatory damages as well as treble damages for alleged willful infringement and reimbursement of plaintiff's costs, disbursements and attorneys' fees. On May 29, 2024, Gogo Inc. and its subsidiary Gogo Business Aviation LLC amended their answer and counterclaims in the same suit, alleging that three of the six patents asserted by the plaintiff are unenforceable due to inequitable conduct before the U.S. Patent Office. A number of dispositive motions were filed on October 25, 2025, and the Court issued orders resolving those motions. SmartSky’s motions were denied. Gogo’s motion for summary judgment of invalidity on one of SmartSky’s asserted patents was granted. The Court also gra nted Gogo’s motion for summary judgment of no lost profits and Gogo’s motion to exclude SmartSky’s damages expert’s opinions on lost profits and reasonable royalty damages. On November 17, 2025, the Court commenced a jury trial on the plaintiff’s claims. On November 21, 2025, the jury determined that Gogo willfully infringed the plaintiff’s asserted patents and returned a verdict in the total amount of $ 22.7 million. A one-day bench trial is scheduled on March 4, 2026, to address Gogo’s inequitable conduct defense. Post-trial briefs on the jury trial are due March 18, 2026, and post-trial briefs on the bench trial are due March 30, 2026. Briefing is 93 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) expected to be completed on these motions by May 8, 2026.We continue to vigorously defend our position in the infringement suit to challenge both the verdict and the amount of the award in the trial court and will do so in the appellate court if necessary. The outcome of the underlying litigation is inherently uncertain. No judgment has been entered and Gogo has not paid any portion of the award. On March 5, 2024, Gogo Inc. and its subsidiary Gogo Business Aviation LLC filed counterclaims in the same suit, alleging that SmartSky’s ATG network, Flagship equipment, and LITE ATG equipment infringe three patents owned by Gogo. Gogo’s counterclaim suit seeks an unspecified amount of compensatory damages as well as reimbursement of Gogo's costs and attorneys' fees. On April 10, 2024, the Court held that Gogo's counterclaims would proceed under a separate schedule and would be tried separately from SmartSky's claims. On December 31, 2025, Gogo Inc. and its subsidiary Gogo Business Aviation LLC amended their counterclaims to add Apcela IFC JV, LLC as a counterclaim defendant. Under a schedule agreed upon by the parties, fact discovery and claim construction proceedings will be substantially completed by June 26, 2026, and expert discovery by September 25, 2026, with dispositive motions to follow. A trial date has been scheduled for March 8, 2027. On December 16, 2024, SmartSky sued Gogo Inc. and its subsidiaries in the U.S. District Court for the Western District of North Carolina alleging that Gogo maintains an illegal monopoly over air-to-ground broadband inflight connectivity products and services and has blocked SmartSky from entering the market in violation of antitrust laws. SmartSky also alleges claims of false advertising, unfair and deceptive trade practices, and tortious interference. The suit seeks actual damages, treble damages, punitive damages, disgorgement of profits, reimbursement of plaintiff's costs, attorneys' fees, pre- and post-judgment interest, and interest on actual damages. On March 14, 2025, Gogo Inc. and its subsidiary Gogo Business Aviation LLC filed a motion to dismiss for failure to state a claim. That motion is still pending. Fact discovery is set to be completed by June 5, 2026, and expert discovery by September 10, 2026, with dispositive motions to follow. A trial date has not been set. We will vigorously defend our position in this lawsuit. The outcome of the litigation is inherently uncertain. From time to time we may become involved in legal proceedings arising in the ordinary course of our business. We cannot predict with certainty the outcome of any litigation or the potential for future litigation. With respect to such legal proceedings, we accrue a loss when it is probable and its amount can be reasonably estimated. Regardless of the outcome of any particular litigation and the merits of any particular claim, litigation can have a material adverse impact on our Company due to, among other reasons, any injunctive relief granted, which could inhibit our ability to operate our business, amounts paid as damages or in settlement of any such matter, diversion of management resources and defense costs. The Company’s accrual for probable and estimable loss contingencies was $ 11.5 million as of December 31, 2025 , and is recorded in Accrued liabilities on the Consolidated Balance Sheets. Other (income) expense, net on the Consolidated Statements of Operations for the year ending December 31, 2025 includes a $ 10 million accrual for the aforementioned litigation in which we are a defendant. The Company also recorded a $ 1.0 million receivable for loss recovery during 2025, which is reflected within Prepaid expenses and other current assets on the Consolidated Balance Sheets as of December 31, 2025 and a reduction to expense in Other (income) expense, net on the Consolidated Statements of Operations. 18. Accumulated Other Comprehensive Income (Loss) The following is a summary of changes in accumulated other comprehensive income (loss) by component (in thousands): Change in Currency Fair Value of Translation Cash Flow Adjustment Hedge Total Balance at January 1, 2023 $ ( 1,225 ) $ 31,353 $ 30,128 Other comprehensive income (loss) before reclassifications 291 4,579 4,870 Less: income realized and reclassified to earnings — 19,202 19,202 Net current period comprehensive income (loss) 291 ( 14,623 ) ( 14,332 ) Balance at December 31, 2023 $ ( 934 ) $ 16,730 $ 15,796 Other comprehensive income before reclassifications ( 823 ) 4,413 3,590 Less: income realized and reclassified to earnings — 13,819 13,819 Net current period comprehensive income (loss) ( 823 ) ( 9,406 ) ( 10,229 ) Balance at December 31, 2024 $ ( 1,757 ) 7,324 $ 5,567 Other comprehensive income (loss) before reclassifications 712 ( 814 ) ( 102 ) Less: income realized and reclassified to earnings — 5,421 5,421 Net current period comprehensive income (loss) 712 ( 6,235 ) ( 5,523 ) Balance at December 31, 2025 $ ( 1,045 ) $ 1,089 $ 44 94 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) 19. Common Stock and Preferred Stock Common Stock – We have one class of common stock outstanding as of December 31, 2025 and 2024. Our common stock is junior to our preferred stock, if and when issued. Our Third Amended and Restated Certificate of Incorporation authorizes a total of 500,000,000 shares of common stock with a par value of $ 0.0001 per share. Preferred Stock – Our Third Amended and Restated Certificate of Incorporation authorizes 100,000,000 shares of new preferred stock with a par value of $ 0.01 per share. No shares of this new preferred stock have been issued. The preferred stock may be issued, from time to time, in one or more series as authorized by the Board of Directors, which has the authority to designate the terms of any series of preferred stock issued, including, without limitation, the number of shares to be included in such series of preferred stock, any dividend, redemption, conversion rights or voting powers and the designations, preferences and relative participating, optional or other special rights. Share Repurchases – On September 5, 2023, we announced a share repurchase program that grants the Company authority to repurchase up to $ 50 million of shares of the Company’s common stock. Repurchases may be made at management's discretion from time to time on the open market, through privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The repurchase program has no time limit and may be suspended for periods or discontinued at any time and does not obligate us to purchase any shares of our common stock. The timing and total amount of stock repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. We do not expect to incur debt to fund the share repurchase program. No shares were repurchased during the year ended December 31, 2025. During the years ended December 31, 2024 and 2023 , we repurchased an aggregate 4.0 million shares and 0.5 million shares, respectively, of our common stock for $ 33.2 million and $ 4.8 million, respectively. As of December 31, 2025, approximately $ 12.1 million remains available under the share repurchase program. 95 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) 20. Condensed Financial Information of Registrant The following presents the condensed financial information of our parent company on a standalone basis. Gogo Inc. Condensed Balance Sheets (in thousands) December 31, December 31, 2025 2024 Assets: Cash and cash equivalents $ 582 $ 1,001 Prepaid expenses and other current assets 2,103 1,796 Deferred income taxes 206,260 216,926 Total assets $ 208,945 $ 219,723 Liabilities and stockholders’ equity: Other current liabilities $ 103 $ 37 Investments and payables with subsidiaries 107,713 150,362 Total liabilities 107,816 150,399 Total stockholders’ equity 101,129 69,324 Total liabilities and stockholders’ equity $ 208,945 $ 219,723 Gogo Inc. Condensed Statements of Operations and Comprehensive Income (in thousands) For the Years Ended December 31, 2025 2024 2023 Total operating expenses $ — $ 105 $ — Other (income) expense Interest income ( 42 ) ( 198 ) ( 1,280 ) Other ( 1 ) 1 ( 1,344 ) Total other (income) expense ( 43 ) ( 197 ) ( 2,624 ) Income (loss) before income taxes 43 92 2,624 Income tax provision (benefit) 13,277 4,662 ( 48,075 ) Equity (gains) losses of subsidiaries ( 26,157 ) ( 18,316 ) ( 94,979 ) Net income $ 12,923 $ 13,746 $ 145,678 Comprehensive income $ 12,923 $ 13,746 $ 145,678 96 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements – (Continued) Gogo Inc. Condensed Statements of Cash Flows (in thousands) For the Years Ended December 31, 2025 2024 2023 Operating activities: Net income $ 12,923 $ 13,746 $ 145,678 Subsidiary equity (gains) losses ( 26,157 ) ( 18,316 ) ( 94,979 ) Deferred income taxes 10,666 3,511 ( 49,172 ) Gain on sale of equity investment — — ( 1,343 ) Other operating activities ( 242 ) ( 1,874 ) 2 Net cash (used in) provided by operating activities ( 2,810 ) ( 2,933 ) 186 Investing activities: Investments and advances with subsidiaries 1,201 22,843 ( 8,365 ) Purchase of equity investment — — ( 5,000 ) Proceeds from sale of equity investment — — 6,343 Net cash provided by (used in) investing activities 1,201 22,843 ( 7,022 ) Financing activities: Repurchase of common stock — ( 33,185 ) ( 4,822 ) Stock-based compensation activity 1,190 ( 3,010 ) ( 8,230 ) Net cash used in financing activities 1,190 ( 36,195 ) ( 13,052 ) Decrease in cash, cash equivalents and restricted cash ( 419 ) ( 16,285 ) ( 19,888 ) Cash, cash equivalents and restricted cash at beginning of period 1,001 17,286 37,174 Cash, cash equivalents and restricted cash at end of period $ 582 $ 1,001 $ 17,286 Cash, cash equivalents and restricted cash at end of period $ 582 $ 1,001 $ 17,286 Less: current restricted cash — — — Less: non-current restricted cash — — — Cash and cash equivalents at end of period $ 582 $ 1,001 $ 17,286 97 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.