In-flight networking firm Gogo posted a larger-than-expected quarterly loss on Monday, sending it shares plummeting, as the company eyes expanding to international markets.
The company announced a net loss of $24.9 million, or 29 cents a share (statement), down from $18.7 million, or 22 cents a share on the same quarter a year earlier.
Wall Street was expecting a loss of 26 cents a share.
Gogo's revenue was up, however, to $104 million, above expectations of $103.7 milion.
Meanwhile, the company's operating expenses rose by almost one-quarter. That's because the company's expenses have risen as it spends millions on expanding internationally, and covering regulatory fees.
The huge loss, but strong revenue boils down to a relatively unique service rarely found elsewhere. Gogo offers in-flight connectivity to US domestic flight passengers, with some international flights already covered. New features are added all the time, including the ability to send text messages at 30,000 feet.
But the US market is on the most part covered, thanks to beamed connections from the air to ground towers. The next step are international markets, which on a technical level is a touch trickier.
By investing in, trialing on Virgin Atlantic at first, Gogo aims to fill the gap in transatlantic and trans-oceanic flights.
The 2Ku service is slated to be ready by mid-2015.
In its earnings report, Gogo said it continues to invest in relationships with United Airlines and Air Canada, along with international partners, including Vietnam Airlines and AeroMexico, which will help in the coming fiscal quarters to recoup some of the losses it's made this year by investing in international markets.
Exactly how long Gogo can keep inflating before it pops remains unclear. Are its priorities maintaining a solid US-only service, or pushing to as many markets as it can?
Investors will be keeping a close eye on the company, considering shares in Gogo have lost around one-third of their value this year alone.