UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One):
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
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For the quarterly period ended |
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
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For the transition period from __________ to __________ |
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of Incorporation or Organization) |
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(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
Telephone Number (
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Class |
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Trading Symbol |
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Name of Each Exchange on Which Registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐No
As of October 31, 2024,
Gogo Inc.
INDEX
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Page |
Part I. |
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Item 1. |
2 |
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2 |
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3 |
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Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) |
4 |
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5 |
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Unaudited Condensed Consolidated Statements of Stockholders’ Equity |
6 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
8 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
25 |
Item 3. |
38 |
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Item 4. |
38 |
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Part II. |
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Item 1. |
39 |
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Item 1A. |
39 |
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Item 2. |
41 |
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Item 3. |
41 |
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Item 4. |
41 |
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Item 5. |
41 |
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Item 6. |
42 |
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43 |
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1
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Gogo Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
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September 30, |
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December 31, |
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2024 |
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2023 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net of allowances of $ |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Non-current assets: |
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Property and equipment, net |
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Intangible assets, net |
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Operating lease right-of-use assets |
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Investment in convertible note |
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Other non-current assets, net of allowances of $ |
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Deferred income taxes |
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Total non-current assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued liabilities |
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Deferred revenue |
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Current portion of long-term debt |
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Total current liabilities |
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Non-current liabilities: |
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Long-term debt |
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Non-current operating lease liabilities |
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Other non-current liabilities |
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Total non-current liabilities |
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Total liabilities |
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Stockholders’ equity |
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Common stock, par value $ |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Treasury stock, at cost |
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( |
) |
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( |
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Accumulated deficit |
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( |
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( |
) |
Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See the Notes to Unaudited Condensed Consolidated Financial Statements
2
Gogo Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
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For the Three Months |
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For the Nine Months |
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2024 |
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2023 |
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2024 |
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2023 |
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Revenue: |
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Service revenue |
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$ |
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$ |
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$ |
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$ |
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Equipment revenue |
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Total revenue |
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Operating expenses: |
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Cost of service revenue (exclusive of amounts shown below) |
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Cost of equipment revenue (exclusive of amounts shown below) |
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Engineering, design and development |
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Sales and marketing |
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General and administrative |
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Depreciation and amortization |
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Total operating expenses |
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Operating income |
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Other expense (income): |
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Interest income |
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( |
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( |
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( |
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( |
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Interest expense |
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Loss on extinguishment of debt |
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Other expense (income), net |
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( |
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( |
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( |
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Total other expense |
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Income before income taxes |
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Income tax provision (benefit) |
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( |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Net income attributable to common stock per share: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average number of shares: |
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Basic |
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Diluted |
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See the Notes to Unaudited Condensed Consolidated Financial Statements
3
Gogo Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
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For the Three Months |
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For the Nine Months |
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2024 |
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2023 |
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2024 |
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2023 |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss), net of tax |
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Currency translation adjustments |
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( |
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$ |
( |
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$ |
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Cash flow hedges: |
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Amount recognized in other comprehensive income |
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( |
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Less: income realized and reclassified to earnings |
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Changes in fair value of cash flow hedges |
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( |
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( |
) |
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( |
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( |
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Other comprehensive income (loss), net of tax |
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( |
) |
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( |
) |
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( |
) |
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( |
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Comprehensive income (loss) |
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$ |
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$ |
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$ |
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$ |
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See the Notes to Unaudited Condensed Consolidated Financial Statements
4
Gogo Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
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For the Nine Months |
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2024 |
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2023 |
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Operating activities: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to cash provided by operating activities: |
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Depreciation and amortization |
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Loss on asset disposals, abandonments and write-downs |
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Provision for expected credit losses |
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Deferred income taxes |
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( |
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Stock-based compensation expense |
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Amortization of deferred financing costs and interest rate caps |
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Accretion of debt discount |
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Loss on extinguishment of debt |
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Change in fair value of convertible note and equity investment |
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( |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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Inventories |
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( |
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( |
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Prepaid expenses and other current assets |
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( |
) |
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( |
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Contract assets |
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( |
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Accounts payable |
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Accrued liabilities |
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( |
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Deferred revenue |
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( |
) |
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Accrued interest |
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( |
) |
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( |
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Other non-current assets and liabilities |
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( |
) |
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( |
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Net cash provided by operating activities |
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Investing activities: |
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Purchases of property and equipment |
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( |
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( |
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Acquisition of intangible assets—capitalized software |
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( |
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( |
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Proceeds from FCC Reimbursement Program for property, equipment and intangibles |
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Proceeds from interest rate caps |
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Redemptions of short-term investments |
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Purchases of short-term investments |
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( |
) |
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Purchases of convertible note and equity investments |
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( |
) |
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( |
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Net cash used in investing activities |
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( |
) |
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( |
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Financing activities: |
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Payments on term loan |
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( |
) |
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( |
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Repurchases of common stock |
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( |
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Payments on financing leases |
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( |
) |
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( |
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Stock-based compensation activity |
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( |
) |
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( |
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Net cash used in financing activities |
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( |
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( |
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Effect of exchange rate changes on cash |
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Increase (decrease) in cash, cash equivalents and restricted cash |
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( |
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Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period |
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$ |
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$ |
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Cash, cash equivalents and restricted cash at end of period |
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$ |
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$ |
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Less: non-current restricted cash |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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Supplemental cash flow information: |
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Cash paid for interest |
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$ |
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$ |
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Cash paid for taxes |
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Non-cash investing activities: |
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Purchases of property and equipment in current liabilities |
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$ |
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$ |
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See the Notes to Unaudited Condensed Consolidated Financial Statements
5
Gogo Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share data)
|
|
For the Three Months Ended September 30, 2024 |
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Accumulated |
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Additional |
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Other |
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Common Stock |
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Paid-In |
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Comprehensive |
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Accumulated |
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Treasury Stock |
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Shares |
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Par Value |
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Capital |
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Income |
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Deficit |
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Shares |
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Amount |
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Total |
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Balance at June 30, 2024 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Currency translation adjustments, net of tax |
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— |
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|
— |
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|
— |
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— |
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— |
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— |
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Fair value adjustments of cash flow hedges, net of tax |
|
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— |
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— |
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— |
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( |
) |
|
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— |
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— |
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|
— |
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|
( |
) |
Stock-based compensation expense |
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— |
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— |
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|
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— |
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— |
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— |
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— |
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Issuance of common stock upon exercise of stock options |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock upon vesting of restricted stock units |
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— |
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— |
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— |
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— |
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— |
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— |
|
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— |
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Tax withholding related to vesting of restricted stock units |
|
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— |
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— |
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( |
) |
|
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— |
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— |
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— |
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|
— |
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( |
) |
Repurchase of common stock |
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( |
) |
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— |
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— |
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— |
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— |
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( |
) |
|
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( |
) |
|
Balance at September 30, 2024 |
|
|
|
|
$ |
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$ |
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$ |
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$ |
( |
) |
|
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$ |
( |
) |
|
$ |
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||||||
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For the Three Months Ended September 30, 2023 |
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Accumulated |
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Additional |
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Other |
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||||||||
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Common Stock |
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Paid-In |
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Comprehensive |
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Accumulated |
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Treasury Stock |
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Shares |
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Par Value |
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Capital |
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Income |
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Deficit |
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Shares |
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Amount |
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Total |
|
||||||||
Balance at June 30, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
|
$ |
|
||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Currency translation adjustments, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Fair value adjustments of cash flow hedges, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Issuance of common stock upon exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Issuance of common stock upon vesting of restricted stock units |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Tax withholding related to vesting of restricted stock units |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at September 30, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
|
$ |
|
||||||
|
|
For the Nine Months Ended September 30, 2024 |
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Common Stock |
|
|
Paid-In |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Treasury Stock |
|
|
|
|
||||||||||||||
|
|
Shares |
|
|
Par Value |
|
|
Capital |
|
|
Income |
|
|
Deficit |
|
|
Shares |
|
|
Amount |
|
|
Total |
|
||||||||
Balance at January 1, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
|
$ |
|
||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Currency translation adjustments, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Fair value adjustments of cash flow hedges, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Issuance of common stock upon exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Issuance of common stock upon vesting of restricted stock units |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Tax withholding related to vesting of restricted stock units |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Repurchase of common stock |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Balance at September 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
|
$ |
|
||||||
6
|
|
For the Nine Months Ended September 30,2023 |
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Common Stock |
|
|
Paid-In |
|
|
Comprehensive |
|
|
Accumulated |
|
|
|||||||||||||||||||