Q3 2026 Gogo Inc Earnings Conference Call - GOGO INC

Hello, and welcome to GOGO's third quarter 2026 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to turn the call over to Amy Green. You may begin. Thank you. Good morning. Welcome to GOGO's third quarter 2026 earnings conference call. On the call today to discuss our results are GOGO CEO Chris Moore and CFO Zach Kotner. During this call, Zach and Chris may make forward-looking statements regarding future events and the future performance of the company. Participants are cautioned to consider the risk factors that could cause actual results to differ materially from those in forward-looking statements on this call. Those risk factors are described in the earnings release filed this morning and in a more detailed note under risk factors filed in the company's annual report on 10-K and 10-Q and other documents that the company has filed with the SEC. In addition, please note that the date of this call is November 6, 2026. Any forward-thinking statements made today are based on assumptions as of this date. The company undertakes no obligations to update these statements as a result of more information or future events. During this call, Chris and Zach will both present GAAP and non-GAAP financial measures. And reconciliation and explanation of adjustments and other considerations of the company's non-GAP measures to be the most comparable GAAP measures is available in the earnings release. The call is being webcast and available at ir.gogoair.com. The earnings release, infographic, and associated investor presentation are also available on the website. After management comments, Chris and Zach will host a Q&A session with the financial community only. I will now turn the call over to Chris. Thank you and good morning. In the third quarter, we continue to execute on our transformation from a domestic air-to-ground connectivity company into a global provider of high-speed broadband to the underpenetrated business and military government aviation markets. We are pleased with the strong progress and growing momentum across our next generation broadband technology portfolio, including record shipments of GOGO Galileo in the quarter. Shipments exceeded our expectations. We secured significant new fleet commitments and we unveiled a multi-year technology roadmap that gives customers clear visibility into the future of their GOGO GALILEO investment, taking speeds to over 1 GB by 2032. As we expected, this momentum is becoming visible in our quarterly financial results, which continue to reflect the planned transition of our air-to-ground and legacy customers to our next-generation products. None of this is a surprise to us, and it does not change our conviction of where the business is heading during this transition, which is consistent when reviewing our success with new broadband services. with the prior earnings call, I will spend time detailing each of the product areas before handing over to Zach to walk through our financial results. We are very appreciative of our advisors and lenders who believe in the transformation of our business and agree to amend and extend our approximately $600 million original term loan fee debt. Zach will discuss the details in a few minutes, but the transaction allows the company to continue to prudently invest in our business going forward and improve our balance sheet. In addition, the FCC recently granted us a 10-year license renewal for GOGO's exclusive 4 MHz of ATG spectrum in the 800 MHz band. Recent transactions in the U.S. wireless market underscore the strategic value of nationwide unencumbered exclusive use low band spectrum with favorable propagation and coverage characteristics such as the 800 megahertz spectrum GOGO holds. As more of our ATG customers transition to our satellite-based connectivity, we believe our tower assets and this spectrum can be put to work in new ways, whether by GOGO or others. We are working with our banking advisors and other industry and regulatory specialists to evaluate the full range of possibilities for capitalizing on our spectrum and tower assets, determine their highest and best use, and realize their value for shareholders and customers. Let's now review the progress of GOGO Galileo, our global low-earth orbit service. Galileo has two products, HDX, our entry point LEO solution, purpose-built for smaller aircraft, currently at 60 by 10 megabits, moving to 300 by 100 megabit by 2032, and FDX currently at 195 to 32 megabits, moving to 1.5 gig to 350 megabit over the same period, which extends the capability to mid and large cabin aircraft and enhance performance. They combine to form a scalable, full fleet solution across the breadth of our customer base. We had a record quarter of shipments for Galileo of 172 units, a 59% increase from the second quarter and a 95% increase year over year. This is well above our expectations, bringing cumulative LEO terminal shipments to 690 by the end of the quarter. In fact, as of today, cumulative shipments have surpassed 760 units, which we believe gives us between 35 to 40 percent market share of the LEO business aviation connectivity less than 12 months after introduction, making Galileo the most successful LEO product launch in business aviation. We also ended the quarter with 297 Galileo aircraft online, up 61 percent from the prior quarter. This growth in aircraft online continues to demonstrate our ability to convert shipments into aircraft online quickly and each aircraft that activates represents a seven to ten year recurring revenue relationship. We anticipate that our strong installation rate could continue to drive LEO up our growth and eventually offset legacy ATG declines. As outlined during our last call, our three-year pricing commitment is resonating with customers who value predictable costs alongside operational reliability and we are seeing that reflected in our win rates and corresponding decline in competitive conversions. Our pipeline of qualified Galileo opportunities remains above 500 aircraft even after a record quarter of closed business which indicates that the pipeline is being replenished as quickly as we convert it. There is also a second driver of Galileo service revenue growth that is only beginning to show. To launch the platform, we offered many early customers discounts for an initial period. Those terms are now starting to expire, and those customers are converting to a standard service plan, increasing the revenue we earn from each aircraft already online. The quarter we saw average monthly service revenue per Galileo aircraft increased 6% sequentially. We expect that effort to build through the first half of 2027, so we expect Galileo service revenue to grow both from new aircraft coming online and from rising revenue per aircraft across the existing base, especially as some fleet preferential pricing becomes less prominent. Building on that momentum, I want to highlight the fleet commitments we secured this quarter. The rollouts we discussed last quarter with Vistajet, wheels up and airshare continue to make steady progress and our Galileo deployment with NetJet is complete in Europe and continues in North America. The quarter we added five significant new commitments. First, Tektron Aviation announced they will be the first OEM to offer no charge installation of the GOGO Galileo HDX system on factory new latitude and longitude aircraft delivered starting in 2028 along with a preferred worldwide service rate guarantee for three years planesense one of the largest fractional operators in the united states selected galileo hdx for its entire fleet of 71 pilatus pc12 turbo props and pc24 jets as well as future deliveries with installations expected to be completed by the end of 2027. The Planesense deal was a full fleet decision made in a competitive process and it followed rigorous testing that gave Planesance confidence that Galileo can support a full cabin of passengers streaming video, joining video meetings and using other connected services all at the same time. In addition, Duncan Aviation placed an order of 40 Galileo HDX systems, our largest single MRA order of the year. Also, Bombardier ordered 10 GoGo Galileo FDX and 15 GoGo Galileo SDX units to support their demonstration fleet, aftermarket installations, and OEM deliveries. Finally, in a powerful illustration of what Galileo can enable in a mission-critical setting, Transmedics is now equipping its fleet of 22 Embraer Phenom 300E aircraft with Galileo HDX to support time-critical organ transport missions across the United States, with full deployment expected by mid-2027. Taken together, these winds span fractional special mission MRO and OEM channels and demonstrate the breadth of demand for Galileo across the market that other providers cannot meet. We also continue to expand Galileo's addressable market during the quarter. We receive four additional Supplement Type Certificates for Galilei HDX and one for FDX, bringing our total to 54 STCs across the business aviation fleet. STCs for our FDX are progressing. We anticipate adding approximately five more by year end. These approvals driven by OEMs and MRO networks continue to broaden the range of aircraft on which Galileo can be installed and support the line fit ramp we have discussed on previous calls. In other exciting developments for Galileo this quarter, we unveiled the long-term technology roadmap for the product. The roadmap outlines planned performance enhancements approximately every 24 months over the next six years, targeting download speeds of five times and upload speeds of 10 times current levels, while preserving the existing installation infrastructure wherever possible. We believe this roadmap gives customers confidence that the system they install today will keep pace with their needs over the life of the aircraft, which is central to the seven to 10-year customer cycle I described earlier. The response from customers has been positive and immediate, and going forward, we believe the roadmap will be an important factor in Galileo's competitive positioning against alternatives. Turning to our air-to-ground business, our Q3 results for this business reflect our continued technology transition. Total ATG aircraft online ended the quarter at 5,399, down 6% sequentially. ATG equipment units sold declined to 142, and ATG service revenue decreased due to customer deactivations, including migrations from legacy and advanced systems to competing platforms and our next generation products. These declines reflect the expected ATG transition and customer attrition, and they are the primary driver of the change to our consolidated results this quarter. They also include the NetJets fleet transition we discussed earlier this year, which continues to be in line with our expectations and is partially offset by our Galileo deployment with NetJet, which is progressing well. The substantial majority of our ATG base now possesses hardware that is ready to migrate to LTE. We're also seeing the transition take a second form as ATG customers upgrade directly to Galileo, a positive result that keeps those customers with GoGo on a platform with a longer runway, thereby preserving long-term financial results. On 5G, we shipped 68 units in the quarter, down from the second quarter, and ended with 94 aircraft online. 5G has been in the market for less than a year, and as with any new network, we will continue to optimize the software and the performance as the installed base grows. A number of early placements were made at promotional pricing to see the network, which reduces reported service revenue today, but brings aircraft onto the service, and activations accelerated in the quarter as those units come online. We ended the quarter with 674 C1 systems online, broadly in line with the second quarter, and 4,324 advanced aircraft online. As was the case last quarter, the headline decline in ATG aircraft online is impacted not only by the fleet transition dynamics I discussed earlier, but also a cohort of aircraft that have deactivated ATG while upgrading to Galileo or 5G or in maintenance or being sold. Adjusting for those factors, the underlying rate of ATG attrition improved from the second quarter. Deactivations to competing systems declined meaningfully. A portion of what appears as ATG activations does not represent customer loss, but customers migrating to newer GoGo products, either already reflected in our Galileo base or expected to reactivate on 5G or Galileo in the coming quarters. Now turning to the FCC reimbursement program, we have recently received a six-month extension from the FCC beyond the original November deadline, and we are on track to complete the migration of our remaining classic customers in the first quarter of next year. continue to flow during the quarter and offset program costs, and we now assume 35 million in capital reimbursements for the full year, reflecting longer processing times for program modifications rather than any change to our approved amounts. Once the transition is complete, GOGO will operate the only fully US-based data-sovereign ATG network, and the migration provides every remaining classic customer with a clear path to new equipment. Turning to our geostationary or GEO business, GEO Aircraft Online ended the quarter at 1,285, down 2% from the second quarter and 4% year-over-year, continuing the moderating trend we have seen over the past several quarters as the market transitions towards LEO and hybrid solutions. GEO remains a strategically valuable part of our network neutral offering this quarter we secured the renewal of a sovereign communications lease valued at more than 15 million annually to provide geo connectivity to an overseas government customer a reminder that for certain mission profiles the global coverage and proven reliability of geostationary networks remains essential I would now like to turn to our military and government service service revenue was $37.2 million in the quarter, an increase of 36% year over year, and a decrease of 7% from the record second quarter. As I mentioned last quarter, the second quarter reflected a particularly active operating environment driven by the conflict in the Middle East and the activity moderated somewhat in the first quarter, which is exactly how the business is designed to work. Our blanket purchase agreements remain in place through quieter periods and scale when demand increases. So incremental usage converts to revenue without a new procurement cycle. And while not as high as the second quarter, the third quarter still represents one of the strongest in the history of the business. Beyond the core demand picture, the more important development in our military and government business is the diversification of this business into new mission profiles. GoGo Special Missions, together with InSitu, a Boeing company, successfully completed testing and integration of a modified high-speed satellite connectivity solution for Group 3 uncrewed aircraft systems, moving the UAV opportunity from concept into a real flying capability. During the quarter, we also completed ground testing of a UAV payload on our air-to-ground network, and we plan to fly a Group 2 or 3 uncrewed aircraft on our LTE network before the end of the year. These developments, together with the sovereign communications lease I mentioned a moment ago, along with the business win, significantly broaden the opportunity set for our military and government revenue and extend our network into high-value applications well beyond traditional aviation. Before I turn the call over to Zach, I want to highlight a few financial themes he will discuss in greater detail. First, the decline in service revenue this quarter was driven by the ongoing ATG transition and customer attrition, as expected. Second, Galileo equipment carries lower margins than the ATG hardware it is replacing, but comes with customer longevity, and we are pricing accordingly to win these long-term service relationships, and we believe there is an opportunity to increase ARPA at a later date. That is deliberate, and we expect to pay off as those aircraft come online. Third, the business continues to generate cash. Free cash flow was the highest of the year and up from the second quarter. Finally, the court vacated the $22.7 million jury award in the SmartSky litigation, and we have reduced our expected litigation expense. Final judgment has not yet been entered and the litigation remains ongoing. We are reiterating our full year guidance and with the amendment and extension of original term loan B complete, debt reduction is well underway and remains our primary capital allocation priority. I'll now turn the call over to Zach to walk through the Q3 numbers. Thanks Chris and good morning everyone. As Chris just outlined, our third quarter results reflect the transition we've been describing for several quarters as customers migrate from our legacy ATG offerings to our next-generation products. As we expected, that transition weighed on reported revenue and profitability this quarter, while our newer technologies continue to gain momentum. We saw record Galileo shipments, a growing base of aircraft online with our next generation platforms, and a military and government business that delivered one of the strongest quarters on record. Following quarter end, we also took an important step to strengthen our balance sheet, completing the amendment and extension of the consenting lender's loans under our original term loan B, which I'll discuss in more detail later in the call. We remained disciplined on cost and capital allocation, free cash flow improved sequentially, and we are reiterating our full year guidance. GOGO's total revenue for the quarter was $213.2 million, down 5% compared to Q3 2025, and 4% compared to Q2 2026. Service revenue totaled $182.7 million, down 4% year-over-year and 4 percent sequentially. Business aviation service revenue was $145.6 million, down 10% year over year and 4 percent sequentially, driven by the expected decline in ATG service revenue as customers transition to next-generation products. Military and government service revenue was $37.2 million, up 36% compared to Q3 2025, and down 7% sequentially from a record second quarter, as the elevated usage Chris described moderated somewhat. Even with that moderation, this was one of the strongest quarters in the history of that business. As our next generation products move toward broader adoption and their full contribution, military and government revenue will continue to serve as both a stabilizing influence and an important driver of growth. Equipment revenue totaled $30.5 million, down 9% year-over-year and 3% sequentially, due to the decline in ATG unit sales, which fell 52% sequitionally to 142 units. This was partially offset by a strong adoption of our next-generation products, particularly Galileo. During the quarter, Galileo equipment shipments increased 59% sequently to a record 172 units, bringing the year-to-date Galileo shipments to 372. We also shipped 68 GOGO 5G units, down 51% from the second quarter. Turning to our aircraft online metrics, total ATG aircraft online ended the quarter at 5,399, are down 17% year-over-year and 6% sequentially, consistent with the customer transitions from our legacy ATG platform to next-generation technologies. Within ATG, GOGO 5G aircraft online grew to 94 as activations accelerated during the quarter. Galileo aircraft online increased 61% sequentially to 297 aircraft, reflecting continued customer adoption as additional supplemental type certificates come online. Broadband GEO aircraft online ended the quarter at 1,285, down two percent sequentially and four percent year over year consistent with the moderating trend chris described as the market transitions towards leo and hybrid solutions turning to profitability our results reflect the mixed shift under the way in the business gross margin for the quarter before depreciation and amortization was approximately 40 percent compared to 42 percent in the second quarter driven by lower atg service revenue which carries our highest margins. As a reminder, Galileo shipments carry lower margin than ATG hardware they replace and several fleet orders were aggressively priced to secure long-term duration service revenue. Below gross profit, we continue to exercise discipline expense management. Engineering design and development expense declined $5.7 million year-over-year due to lower development spending and G&A expense was approximately flat year- over-year. Moving to our bottom line, the net loss for the quarter was $3.2 million compared to a net loss of $1.9 million in the third quarter of 2025 and $2 million in the second quarter of 2026. Third quarter results include a $6.1 million non-cash increase in the fair value of the SATCOM direct earn-out liability. Adjusted EBITDA for the quarter was 41 million, down 27% from $56.2 million in third quarter 2025 and down 24% from 53.7 million in the second quarter of 2026 driven primarily by lower atg service revenue adjusted even on the quarter includes 4.1 million of ongoing litigation expenses looking at capital allocation reducing leverage remains our highest priority and the original term loan b amendment and extension we announced is a meaningful step toward that goal support from lenders holding substantially all of the facility we extended the maturity of the consenting lenders loans by approximately two and a half years to october 2030. we have also committed to 75 million principal payments by the end of 2027 including 25 million paid down immediately at closing 30 million by the end of this year and a further 20 million by the end of 20 27 and the total debt repaid inclusive of our new amortization schedule is 92 million over the same period This gives us the runway to execute the Galileo and 5G transition while putting our commitment to directing free cash flow toward debt reduction directly into the credit agreement. And the level of lender participation reflects confidence in both our cash generation and our strategy. Turning to cash flow, net cash provided by operating activities totaled $26.3 million compared to $32.3 billion in the second quarter. Free cash flow was $28.1 million compared to $21.6 million in the second quarter and $30.6 in the prior year quarter. The sequential improvement reflects lower net capital expenditures and a reduction in inventory as Galileo's shipments accelerated, partially offset by lower adjusted EBITDA. We received $14 million in FCC reimbursements during the quarter, bringing the program-to-date proceeds to $150 million. We ended the quarter with $90.7 million in cash and cash equivalents, up 27.6 million from the end of the second quarter our net leverage ratio of quarter end was four times compared to 3.8 times at the end of the 2nd quarter the increase reflects lower trailing 12 month adjusted ebitda rather than an increase in debt in our earnings release this morning we've reiterated our full year 2026 financial guidance we continue to expect total revenue in the range of 870 to 895 million with approximately 84 generated from service revenue and 16 from equipment revenue we expect adjusted even on the range of 175 million to 185 million that range now includes approximately 18 million of ongoing litigation expense down from 22 million in our prior guidance following the delaware district court's ruling in the smart sky matter net capital expenditures are still planned to be approximately 20 million this now assumes 35 million in fcc reimbursement down from 45 million reflecting longer process processing time for program modifications with a portion of both the reimbursement and the related spending shifting into 2027. overall our third quarter results reflect the planned transition of our revenue base as customers move from Legacy ATG to Galileo and 5G and our continued focus on execution through that transition we're converting record Galileo shipments into a growing base of recurring service revenue our military and government business delivering durable contracted revenue through changing demand environments and we have taken a meaningful step to strengthen the balance sheet with the amendment and extension of our original term loan B at the same time we remain disciplined on how we manage costs allocate capital directing free cash flow toward debt reduction while investing in products and capabilities that will drive our growth we believe this balanced approach positions as well to deliver increasing shareholder value over time I finally want to thank the entire go-go team for the continued hard work and commitment serving our customers as we execute on this transformation. Operator, this concludes our prepared remarks. Please open the line for questions. Thank you. Ladies and gentlemen, as a reminder to ask the question, please press star 11 on your telephone, then wait for your name to be announced. To withdraw your question, please press start 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Justin Lang with Morgan Stanley. Your line is open. Yeah, hi. Good morning. Thanks for taking the questions, Chris and Zach. I wanted to actually start on the spectrum, given the license renewals and, as you alluded to, some recent higher-profile transactions in this space. I'm just curious, Chris, if you could talk a little bit more about about what's on the table in terms of highest and best use that you referenced earlier and how developed some of that thinking is. Thanks. Hi, Josh and Anne. Good morning. Good to speak to you. Before I answer that question, I will just say a quick remark. I apologize to everybody on the call that we have the late releases this morning. That was down to our amended extend for the term line B, and we appreciate everybody's patience and support. Regarding the spectrum, It's a great question. We're really excited about looking at that prospect. We've obviously engaged a bank and advisors who are in this space. I would start with the, if you look at the FCC's posture at the moment, it's obviously highest and best use. We believe that even with our network utilization across our ATG customers, there is still room for further extraction of value. If you look at what we're doing in the UAV space with unmanned aerial vehicles, I think there's more further opportunity in those use cases towards unmanned aircraft systems. And that has opportunity in its own right. terrestrial mobile carriers, as you've seen with the recent grain auction, and also D2D. The amazing thing with our spectrum, and it's obviously very unique, is that it actually can be applied across those three areas. We obviously need to explore those opportunities with our advisors, but we kind of find, you know, with that spectrum, it can go through buildings. It's really high utilization potential. I think if you look at the D2D space, it's pretty exciting on that. Terrestrial mobile carriers, obviously, around Verizon, what they've been doing, and then obviously with the recent acquisition of grain spectrum as well, it's the right time, we feel, to make sure that we extract the most value for our shareholders and our customers as we move to more broadband in our transition, but also utilize our assets. Got it. That's a great color. And then maybe switching gears to Galileo, a new one for Zach, actually, just given where things stand today, could you give us a sense of sort of updated expectations around the shape of growth in Galileo AOL into next year and then maybe early HTX, FDX breakdown? Yeah, so I think it's still predominantly HDX, right? And I think, you know, while we aren't giving 2027 guidance on this call, we do feel like the kind of shipments number we've seen this year is repeatable, especially as these OEMs come online. Like, you know, as you saw in the release, and again, apologies, it was late, but, you Know, the order from Bombardier is, I would say, a great kind of indicator of how they view the product. And same thing with Textron. So, again, too early to say where it's going, but we feel confident that the demand is still strong. Yeah, I can just add to that. I think they obviously cut Textron in the script, but that's standard fit. So to deselect means you're deselecting a free service, a standard fit from production. So I think that confidence from the OEM is going to start really shining through in the next 12 months. And then Bombardier also placing those orders, equipping its demonstration fleet. We're really excited. I think this is a really good start, and you can start seeing that momentum in our Galileo shipments. Got it. And then just on the ATG deactivations, do you have a sense of what percentage of those this year are actually customer upgrades? We do. I don't have it right in front of me, but Justin, we can get you that offline. Okay. Okay, great. All right. Thanks for the time. But I will say it was the highest in this quarter that we've seen. Encouraging. Thanks. Thank you. Our next question comes from the line of Scott Searle with Roth Capital Partners. Your line is open. Hey, good morning. Thanks for taking the questions. Nice job in terms of seeing the Galileo momentum continue. Maybe just to follow up on the last question on the ATG front, could you provide a little bit of color of when you look at the installed AOL base, What still is at risk when you look at legacy that has not converted over to C1 at this point in time to kind of calibrate, you know, how much we have to work through with the continued transition to at least the lower end of the equation? And then, you Know, maybe as well, you Now, the Avance installed base for ATG, you How much of that is churning off in a given quarter that you're losing to Galileo versus just going away or going to a competitive competitor? Yeah, on the classic side, so as we said before, we anticipated about 200 of those would go dark at the end of the year, but that was based on the previous FCC cutover, so obviously that gives us a little more time to work through those. The other side of the equation is, as you saw, the 5G numbers are a little bit softer, So we still anticipate the net air-to-ground tail to be down about 1,200, even with the 5GP. On the advanced front, I will say, you know, we saw the lowest number we've seen for people going to competitors. So that was a good sign. And so, like I said, some good upgrades. We can give you the number up front. I don't have the sheet right in front of me. But, you Know, it's good to see that, you Now, we are upgrading these guys at a higher flip that we've seen before yeah i would also add to that i mean it's just you know with the air to ground piece clearly the attrition going to competition slowing down uh a lot it wasn't high anyway but if you look at actually the quarter over half our equipment revenue uh was satisfied equipment in the quarter so i think that's a testament to people utilizing our air to ground services with our leo services and also transitioning potentially to leo if they want high broadband. And as we mature the 5G network and get those speeds up for the customers as well, I think there's great opportunity there. And also, as I mentioned before, to Justin is utilizing the spectrum in the best form. Chris, maybe just to follow up on that, is there a timeline that you're comfortable with that the ATG business will bottom? Will that coincide now with the cutover being pushed out two quarters, or is it the visibility and the comfort with that still not there yet? I think it's a bit too early to give you the exact timing of that. One thing I would say is the FCC gathers an extension for the rhythm replace, so we're now planning on doing the flash cut into Q1 next year. I think when we see that, then we'll have more confidence. And then at the same time, I think with the Galileo momentum, it's offsetting a lot of that loss. I think the other thing that, you know, we mentioned in the call earlier is that every time we sell a Galileo system, it's really a seven to 10 year cycle that we typically see on attrition with customers when they're making that capital investment on the airframe. So as the ATG numbers come down, it's also how the LEO business is also going up. And our long-term view on ATG is obviously still a very, very important service to us. Yeah, and Scott and Justin, I was able to pull up the numbers you guys both asked. Paul, this is just very much that. But within those deactivation numbers, 71 are upgrades either to Galileo or 5G that's not been activated, with, obviously, the vast majority being Galileo. But it was nice to see, again, like, I know we've been talking about it, but it's finally, you know, the upgrades are starting to accelerate. Great. And, Chris, if I could follow up, in terms of the geo front, it sounds like, you Know, there's little headwinds on that front related to utilization in the quarter. But if you look at macro events and the recent throttling of Starlink, starshield um in the ukrainian events um it's caused a lot of consternation out within the industry about reliability about sovereignty how is that impacting your business are you seeing a lot more inbounds on that front how is the overall pipeline there so there's some way you could help us you know at least qualitatively if not quantitatively you know give us an idea what that looks like yeah i think i mentioned it in the call as well if you look at our pipeline The fact that we're still kind of like, you know, high confidence pipelines still around 500 and we're closing that much business and we'll keep around that number is actually really exciting. So we're actually feeding the pipeline really quickly now. We're also closing business. We've got really great shipments. The OEMs are becoming really, really engaged. I think there's a general excitement around the company. You can see it with the staff as well. And when we're talking to customers and that momentum is really carrying through. so we're really genuinely very excited but you know from a competition point of view I think the things that we're reliable on is and we're focused on is making sure customers have price guarantees for three years. That doesn't preclude us from looking at the ARPA over the next 12 months that's I think that's some opportunity there because obviously we're a lot cheaper than our competition at this point in time so I think there's some opportunity but at the moment this is about uh uh how we perform in the market how we enter the market we are the new entrants in the marketplace we are also the fastest growing new entrance in the market which is really again really good testament to the team our customers and also our partners in that as well so i do think some of those global political events are probably giving us good effect um you can also see that in our government business which is 36 percent year-over-year up, which is significant. And we're also closing more business around that and making Galileo more prevalent in that. And also coming along with new opportunities for ATG with the UAB testing and looking at UAS, unmanned aircraft systems, and potential around that. So I do think the geopolitical environment is definitely an opportunity for us. But at the moment, I think that's the big thing we're focused on is we're an aviation business. We're really good at what we do. And it's now starting to get some really serious momentum, which is really exciting. Hey, Chris, with that backdrop, is there a growth rate that you're comfortable with for the MilGov business over the next couple of years? I think we don't want to discuss the growth percentages on the call. but I've said it on previous calls, we're very optimistic about this segment. I think the interesting thing about this segment is we're not having to repurpose our design technology because we understand aviation so well that ultimately we're taking a product portfolio designed for commercial customers and going into global government customers and enabling them to go onto the same platform. I think it's really interesting for the government um you know it's not the thousand dollar hammer moment for them right you know our approach is making sure we have cost-effective solutions for them so we really think this uh market's really got some great potential and then i just touched on the uas i mean if you look at that you know there's a lot of talk about counter drones or surveillance so having a sovereign based and really think that it's a sovereign-based owned communications network because it's not just the spectrum, but the towers and how we have those towers deployed, really has a lot of value and how that can be really versatile in our growth strategy and how we use our assets moving forward. I think the team's really done a good job, and that's why we've engaged advisors as well, because I think there's a lot more value that we can deliver for the business. Hey, last thing, if I could, Zach, you know, in terms of litigation expenses have come down a little bit. How should we think about it in terms of 27 and calibrating the OPEC structure in general? At the current levels we're at, is this what we should be thinking about modeling over the course of 27? What are the gives and takes in terms of incremental costs to complete STCs and otherwise? How should we be thinking that structure in 27? Thanks. Yeah, sorry. So I'll hit the litigation one first. So, obviously, we were pleased with the win we received, and now it's kind of trying to work with the parties to figure out the next steps. It should come down dramatically, and obviously, if there's some sort of global settlement, it'll go away. Our current estimate is about half of what we spent this year, you know, and again, we're keenly focused, and we do feel like the last ruling gives us some good standing to close this thing out. And then the second – sorry, what was your second question? Just OPEX in general, you know, looking at where you finish the third quarter. I mean, I think, you Know, OPEx excluding DNA should kind of hang out around the high 100s, low 200s. Great. Thanks so much. Thank you. Please stand by for our next question. We have a follow-up question from the line of Justin Lang with Morgan Stanley. Your line is open. Yeah, hey, thanks for seeking me back in. I thought I'd try one more on spectrum. Chris, you mentioned a few times that you've engaged an advisor here. Just curious if you can comment if that's been in sort of response to inbounds you've received from other parties on your holdings, or is this more forward-thinking, hey, there's a re-rating maybe of spectrum value and you want to explore optionality in that realm? Just curious what the impetus for the advisor was. Thanks. Yeah, I think, obviously, we've engaged the advisors and the banking guys. It's too early to kind of go into a lot of that at the moment. Most important thing is the engagement. And why have we looked at that engagement? I think just looking at the technology profile, the SEC positioning, recent transactions in the space, the team's done a great job strategically looking at this. We've been talking about UABs, UAS for like nearly a year. We think this is a great asset for the business. It would be foolhardy of us not to look at this asset and look at how we extract the most amount of value. And this asset's actually transformed over time. I think, you know, spectrum's a finite thing, and we have really useful spectrum. It's very unique. I think it's a real asset for the business that we've potentially undervalued in the past. And it's our job and it's good fiduciary duty to extract the most amount of value out of that asset moving forward. So we'll keep you guys advised on it. But we're really excited of how we look at this over the next few quarters. And then we'll obviously advise if these things unfold. Helpful. Thanks. Thank you. As a reminder, ladies and gentlemen, that's star 11 to ask the question. I'm showing no further questions in the queue. I would now like to turn the call back over to Chris Moore for closing remarks. Chris Moore Thank you, Operator. Just to reiterate, Galileo had a record quarter strong progress on shipments, installations, and early activations. I want to thank the team for working long hours, especially last night, for finalizing the A&E at 600 million term line B. I think that's a fantastic result. company. Another strong quarter for MilGov business, as I mentioned before, 36% year-on-year growth. And finally, as we've discussed a lot on the call, engaging outside parties to look at the utilization of our spectrum. We thank everybody for their time today. And again, I'm sorry for the lateness on the releases this morning. Thank you. That concludes today's conference call. Thank you for your participation. You may now disconnect.