solid cash We to believe in revenue in and business, new core strength service the free invest our revenue the and Google second continues XG recurring of our as our by Galileo. fueled demonstrate quarter. we products, performance Service flow
and shift quarter, our in EBITDA ahead timing adjusted high second EBITDA pull-in resulted the sequentially but declined orders equipment was quarter of expectations. expenses, which of the OEM of first adjusted With in
the We continue plan XXXX long-term XXXX. for our year through growth within believe our trough extending that to is profitability and
strategic I'll with context through our start timing cash our guidance early finally, XG a turn performance capital targets, today, I'll current in which priorities. of Gogo now by XXXX. revised flow on the to then wrapped for conclude expected and long-term additional investments majority the acceleration reflects in walking continue XXXX Gogo's my quarter we significant
In by I XXXX, sheet financial free currently balance will second As launch. target allocation and And our to our remarks
service driven delivered the equipment prior X% of quarter, by second the quarter. total over was $XX.X Gogo's sequentially, Gogo million, revenue about X% revenue. decrease than slightly revenue in up a first year X% record just the of and a higher and in year-over-year million, $XXX.X decline For
down Our defer to, a the decline ATG anticipation Oakleigh life as Gogo Galileo. year-over-year of new X% lower X% of was X.X% Total deactivations The decline XG aircraft and the we of grew and and product quarterly mentioned, sequentially. aircraft higher classic online activations driven due year-over-year was cycle are by dynamic X,XXX, and sequentially XX% total an in launch purchases now customers fleet. our of XX% Avance to online and X,XXX, as experiencing comprises increase
Our in progress has in the we upgrade to driving expect quarter reflects existing Avance to to accelerate XXXX. our from aircraft in Avance penetration
Avance record within Converting these classic activity Avance less years. a Classic the remains doubled priority, X second and conversions fleet. our online base than
to once Gogo times on and the installations. to that win by continue for seamless path in providing upgrade cycle maintain Gogo retention to maintenance Galileo Avance flowed a is improvements a XG We a it conservative strategic launched. have upgrade prolongs Every view customer as
the ARPU However, and of cycle mentioned, $X,XXX, Gogo the will quarter. our process expand are to opportunity as XG X.X% on the over put X% quarters. previously life continue further The aircraft year-over-year product and over ATG the
Total online dynamics ATG to time. to we coming upgrade grew and pressure Galileo initiated anticipated price growth ARPU growth increase launches first in sequentially, reflecting
was in revenue combination place expect with that product typically in equipment and a year-over-year XX% to we but sequentially, of the attribute strong quarter and the we second revenue. to first life our which to declined equipment XXXX. towards trend revenue Equipment the ramps delivered the in dynamic million in expectations of cycle. first and given shipments. life line Avance pull-forward the back and quarter Gogo's year, shipments the quarter equipment revenue Moving with half channel, overall XX% shipments OEM the for Gogo product cycle $XX.X the reverse of XXX
to margins center quarter, the than Gogo Turning of network and lower second to higher delivered costs. profitability. service our due expectations in XX% data
XX% Service with years the Galileo slight increases service revenue in quarter generation be revenue range a primarily the Gogo and We year of service continue margins and cash percentage year, decrease primary are as second for to margin a lower lower XX% quarter, expectations margins with periods, future and and free in levers as to due in this were shipments. a service prior the function profit to flow expect MAX. the creation. Equipment in as than prior value line of long-term lower revenue
margins due expect of to back XXXX product We to to decline shipments life dynamics. in largely the equipment due half lower cycle the
Now operating expenses. on to
was driven quarter development, design and The combined year-over-year general legal increased administrative year-over-year $XX.X and to and Second engineering, sequentially million. XX% and expenses and marketing XX% increased sales increase mainly by expenses. support External expenses and general legal total vendor matters, by and in million driven the for efforts. out of quarter million, of financing the litigation $X.X comprised spend second administrative expansion $XX issues global
Gogo significant continue to program. Galileo we investment invest XG and As discussed, year our in a is XXXX we as have
these flow target in next into off cash XXXX head many as costs that free Our we assumes of roll year.
growth these XXXX expect free revenue cash will investments and product We growth support in significant acceleration flow that and beyond.
million well allocation and XG, XG a CapEx. in in timing payments OpEx a adjustment the shift of more second mentioned of efficient million from of XXXX is XXXX to as approximately CapEx. of partner. million in to Gogo the OpEx OpEx million resources Gogo's the approximately will total $X and as in We $X.X XG of the push include in $X This of XXXX reflects expected $X of our $XX milestone quarter timing million $XX previously vendor This terms our comprised was for In spending at XG the and of expect XG second approximately and spend $X $X.X million million now CapEx million. of quarter, with our
the maintain from total anticipate development impact external estimate to our and recent XG in cost on overall We million the deployment program no program costs most continue for negative of delays. our and $XXX
of In Galileo in Galileo Moving due of initiative. to expense include XXXX our Gogo OpEx $XX quarter, We Gogo million now shift to the on to $X.X million expect million recorded approximately in Gogo $X CapEx. OpEx will second $X to a and approximately and Galileo. million CapEx Gogo XXXX related in
and costs to continue expect million $XX solutions external XXXX for of total, XXXX. the million HDX We $XX remainder less XXXX, and in development is in be expected XXXX both the was $XX is in incurred than million and to which FDX in projected
XX% Additionally, will costs Gogo OpEx. be Galileo's in we approximately external development anticipate of
of a to a the The as lower Gogo decrease bottom million was decrease and expenses XX% in million was the quarter expect and million EBITDA program. million taxes primarily unrealized in our In and FCC state at decrease sequentially. we on note program Potential in net as we $XXX operating operating Net decreased for market our to of The supplier adjustments we related had received million. losses XX% our on
Based Moving $XX.X the our is XXXX, asset funding, continue at called loss loss balances grant chipset through on will end our to an driven in net provide to tax FCC sales XG second XX% million now our first not $X.X the net future to the of we value share total affect call. losses, our the in a federal income our value continued delivered made adjusted a income received cash of update to sequentially. quarter, horizon. $X.X investment will year-over-year fair increased primarily
I and revenue deferred investment. $XXX on mark-to-market convertible net million $XX.X earnings that second second in this quarter our the million of the price by due do in X-year reimbursement out including quarter, adjustment due planning operating progress net support we date fair equipment We operating year-over-year meaningful to account $XX and substantial end line. after-tax quarter. on pay chip $XXX income volatility to XX% decline anticipated. key
granted equipment, and to with submitted XXXX, incurred reductions completion statement. will spend in to quarter, we deadline planning contract multiple income and that pushing FCC, and expenses we receivable to current our XX, to we receivable are As $X and we program of million to This request recorded with $XX.X program extensions complete corresponding June the first is inventory other in
In from need January assets to XXXX. prepaid last a the in XX, and application, we our in reimbursable we plan included In the extension FCC, the X-month pickup assets have during our line balance the fourth and property the a quarter. in million extension the sheet stated with the were the quarter. next
negatively from run second will spend we of flow. with $XX.X funding rip Free and this in we in free cash In flow net reimbursement due cash generated million XXXX, quarter. ago FCC a
On by million lower need we'll partial is cash a XXXX $XX.X out continue the the we cash that of timing As and XXXX to forecasting last to reminder, in driven to the the the XXXX, flow, and to capital. late of reimbursement which impact EBITDA our improved of year replace free the primarily and expected money increase through flow. in decreased million funds program, to are working cash program from support and programs solid an period, free $XX.X quarter, quarter, from lower interest
the in remaining $XXX outstanding to line our cash Gogo our and million our with our Gogo's Now short-term range investments $XXX undrawn. with discussion principal in target in net a and X.Xx. I'll leverage balance to X.X term of with on $XXX.X remains of turn sheet. ended loan million quarter of revolver X.Xx million
second Our hedge million. cash interest paid flow of was $X.X net cash quarter; for the
mentioned have from increasing a end the down million of of we loan the hedged. to million to of At rate hedge strike XX% July, stepped our prior hedged. in to $XXX XX% and had decline currently quarter, agreement fourth in a hedge place X.XX% X.XX%, Starting quarters, with previously expected in the hedge we per quarter. the approximately flow $X in resulting is cash loan the As
interest cash net the expected million. debt XXXX, hedge cash approximately be Assuming down, for to of is flow paid no further pay $XX
Gogo's a capital allocation Now provide me of let recap priorities.
third, adequate for environment a finally, and and opportunities to with returning appropriate including and level competitive in Galileo, leverage invest XG target financial the X.Xx, First, second, net to continuing Gogo ratio to X.X economic liquidity; maintaining to of capital maintaining strategic value, an leverage drive of positioning shareholders.
approximately shares the debt has We the execute requirements, X.X total $XX million investment million repurchase evaluate We second our million approximately we believe XXXX. approved further in
Gogo over a paydowns for Board $XX in million across quarter, and million million of shares. have our X.X we approximately all are remaining at priorities. repurchased and product opportunistically to cost September executed $XX of positioned the authorization $XX quarters. In well repurchase X shares last
and increase cash to our to pay further our to expected Our return is flexibility flow in shareholders ramps capital XXXX. up down debt as free
to turn financial I'll our Now outlook.
long-term XXXX X updated our guidance have financial reflect our and to changes. targets We
First, at XG XXXX for in to originally launch for the timing XXXX; is end that projected. QX of the aircraft and than the occur online now Gogo second, expected lower
completed we we that that long-term frame. do as note However, normally this a annually plan full bottoms-up not January have at time time the in
of the XXXX anticipate our fiscal million. reduction tied XXXX to year the cycle the the our $XXX $XXX of lower the revenue guidance versus and million in dynamic due range XG half we the of channel to now is life in of For the to in $XXX Gogo launch product second revenue Galileo. million equipment primarily $XXX ahead of to prior million The year,
now approximately anticipated Secondarily, million. to million expect $XX of be to XXXX service $XX our our online revenue lower-than-expected CapEx guidance aircraft
We prior is versus reduce growth.
SEC cash spend million in to to XXXX quarter. primarily free Gogo also approximately for savings. the million spend is XG, spending prior including XXXX includes million XG for strategic our We target and $X expected in revised shift $XX in expected a of flow and approximately million. shift $XX million CapEx some million, $XX to $XX Galileo This spend. reimbursements flow LTE in lower the result our to $XX cash the million compared includes $XX due decrease XXXX, of and the anticipate million the
The approximately $XX $XX as The decrease which recede. to and program LTE Our these and is cost stated development increase of the range within net reimbursements FCC a of shifts in initiatives guidance of of prior million FCC free spend is lower increase to guidance prior spend an expected from program. FCC spend, non-reimbursable network expectations to initiatives, strategic The reduction the and is reflective in compared build-out timing including
of to high the of guided target In million $XXX the EBITDA to adjusted million. end range previously continue addition, we $XXX at
increase lower are However, strategic initiatives, expect compared expenses $XX to Despite we year. strategic Galileo including EBITDA guidance, to to date reflecting in legal operating maintaining for now an for and and million expected approximately offset rest incurred expenses XXXX million the continue spend XG initiatives, to shift and previously. operational adjusted revenue, we to Gogo reduce of $XX the in to by the
and our guidance flow of to is of change now are from excluding of the tied end impacts XXXX latest target XXXX, aircraft in million timing a of to QX Gogo For the prior our range top lower-than-expected prior bottom-line million XXXX. effect program $XXX we FCC The targeting long-term and launch at million. $XXX versus free online targets, of to cash XG $XXX of the of the
in will long-term
In by underscores our product unlock strategy significant reiterate and initiatives XX% drive shareholders annual to believe Galileo challenging life we value by in rate growth executing revenue expect Gogo's of XXXX EBITDA cycle, our that summary, and we we term, expect XX% to materially from period revenue XX% the growth. to beginning and customers contributing to our in reaching annual approximately long creation in XXXX. margin XXXX expect sustain that potential adjusted at compound investing we through that the we XXXX, be key outlook Over a to Gogo this continue growth for with and
questions, Before entire want service sentiment to exceptional well customers. their business work we Oak’s concludes their prepared to our to our remarks. the to my to for in open hard gratitude this for I and expressing dedication team
Operator, as as delivering the echo floor Gogo our commitment
question. We are take our first now ready to
