Gogo Inc. · NASDAQ:GOGO
Gogo — Investor Presentation (May 2017)
24 slides from Gogo's investor presentation, May 22, 2017
Slide 1: May 2017 Investor Presentation
May 2017 Investor Presentation Exhibit 99.1
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are based on management’s beliefs and assumptions and on information currently available to manage
Slide 3: Transforming the Aviation Industry
TRANSFORMING THE AVIATION INDUSTRY 1) As of 3/31/2017 2) Based on management estimates, public filings and trade publications of broadband IFC installations as of 3/31/2017 Gogo is the leading global provider of broadband connectivity products and services for aviation >7,300 52% 92% North America m
Slide 4: Delivering Enormous Value
DELIVERING ENORMOUS VALUE Passenger Experience Passenger Connectivity & Entertainment Aircraft Operational Efficiencies Rebooking Travel Baggage Tracker Digitized Attendants Turbulence Avoidance Lower Fuel Costs Maintenance Savings Turbulence Avoidance Internet Streaming Movies IPTV
Slide 5: Most Planes and Large Opportunity
MOST PLANES AND LARGE OPPORTUNITY Gogo CA - Satellite Gogo BA - ATG Gogo CA – ATG Note: Data based on management estimates, trade publications and other public sources as of 3/31/2017 and includes both commercial and business broadband connected aircraft where specified Number of Aircraft Online Com
Slide 6: Unique Leadership Capabilities
Airline support on five continents 1,000+ annual installations Large and growing STC portfolio OEM installation capabilities UNIQUE LEADERSHIP CAPABILITIES INNOVATIVE NETWORK TECHNOLOGY CUSTOMIZABLE PLATFORMS GLOBAL AIRCRAFT OPERATIONS Based on net installations of CA and BA aircraft for the year en
Slide 7: Strategic Priorities
Scale CA-ROW segment to profitability Further reduce 2Ku installation costs Double ARPA by 2021 from Q3 2016 level Achieve free cash flow in 2019 Scale Globally Expand Technology Leadership Achieve Profitability 1 2 3 STRATEGIC PRIORITIES (1) (1) Free cash flow is defined as cash flow from operating
Slide 8: Execution on Strategic Priorities Continues in 2017
EXECUTION ON STRATEGIC PRIORITIES CONTINUES IN 2017 Expand Technology Leadership Achieve Profitability Scale Globally 2Ku flight demo with HTS and next gen modem: 93 Mbps peak speed Average 50 Mbps to passenger 54 devices connected Satellite capacity commitments with Intelsat & SES. Compatible with
Slide 9: Strong Revenue and Profitability Growth
STRONG REVENUE AND PROFITABILITY GROWTH Note: Minor differences exist due to rounding (1) Please see reconciliation of Adjusted EBITDA in appendix 29% CAGR CA-ROW Segment Loss Adjusted EBITDA Revenue ($M) Adjusted EBITDA ($M) (1)
Slide 10: Profitability Path for All Segments
#1 More Bandwidth PROFITABILITY PATH FOR ALL SEGMENTS 18% margin 43% margin Note: Aircraft online and aircraft backlog, which refers to aircraft awarded, but not yet installed, are as of 3/31/2017 Note: Note market share is based on installed aircraft from public sources, trade publications, managem
Slide 11: Leading Technology Platforms for All Aircraft
1 Next Gen ATG expected to be available in 2018 and expected to deliver 100 Mbps 2 Global commercial aircraft estimate from Boeing Market Outlook 2016-2035, excluding regional jets 3 Includes North American business jets and turboprops estimate from JetNet iQ Report Q4 2015 and commercial regional j
Slide 12: 2Ku Momentum Is Strong
2Ku MOMENTUM IS STRONG Note: 2Ku awards include both signed contracts and letters of intent 2015 2016 2014 50 500 1,500 1,600 2017
Slide 13: 2Ku Brings 100+ Mbps Globally in 2017
2Ku BRINGS 100+ Mbps GLOBALLY IN 2017 GOGOAIR.COM | 2015 Mid 2017 2016 Late 2017 2Ku 2Ku 2Ku 2Ku 1 1 Expected results based on management estimates 25 Mbps 50 Mbps 70+ Mbps 100+ Mbps 1 2Ku investor demo flight on May 9th showed: peak speeds of 93 Mbps to passenger, average speeds of 50 Mbps to passe
Slide 14: Next Gen ATG Brings 100+ Mbps to North America in 2018
1 Expected results and availability based on management estimates 1 3 Mbps 10 Mbps 100+ Mbps Uniquely integrates licensed and unlicensed spectrum Leverages existing ground and airborne infrastructure Overnight installation Targeted for smaller aircraft NEXT GEN ATG BRINGS 100+ Mbps TO NORTH AMERICA
Slide 15: Portfolio of Business Aviation Solutions
* Source: JetNet iQ Report Q4 2015 and Gogo estimates as of June 2016 Large Jets ~3,000 Aircraft * * * * PURCHASE MOTIVATION + Bandwidth Applications + GLOBAL: JX/SBB SBB SBB SBB REGIONAL: ATG/4G/ Next Gen ATG ATG/4G/ Next Gen ATG ATG/4G ATG/4G/ Next Gen ATG Medium Jets ~4,000 Aircraft Light Jets ~5
Slide 16: Why Invest in Gogo
WHY INVEST IN GOGO Leading Position, Experience & Scale Large Growth Opportunity Technology Leadership Clear Path to Free Cash Flow
Slide 17: Appendix
Appendix
Slide 18: Growing Shareholder Value
Growing Shareholder Value MORE AIRCRAFT Significant backlog Growing market Leading market share DECLINING INVESTMENT PER AIRCRAFT ARPA GROWTH MARGIN IMPROVEMENT Decreasing installation time Lower airborne equipment costs Higher airborne equipment proceeds Leverage STC portfolio Increase network capa
Slide 19: CA-NA: Strong Revenue and Segment Profit Growth
Segment Profit ($M) Revenue ($M) 34% CAGR Note: Minor differences may exist due to rounding. For 2011 and 2013 ARPA is based on aircraft online and for 2015 and 2016 ARPA is based on aircraft online equivalent. Aircraft Online Annualized ARPA ($k) CA-NA: STRONG REVENUE AND SEGMENT PROFIT GROWTH (1)
Slide 20: CA-ROW: Strong Revenue and Segment Profit Growth
Segment Profit ($M) Revenue ($M) Note: Minor differences may exist due to rounding. Aircraft Online Annualized ARPA ($k) CA-ROW: STRONG REVENUE AND SEGMENT PROFIT GROWTH
Slide 21: BA: High Margin Service Revenue Drives Profitability
Segment Profit ($M) Revenue ($M) 22% Total CAGR Satellite ATG BA: HIGH MARGIN SERVICE REVENUE DRIVES PROFITABILITY Units Online Monthly Average Revenue Per Unit (ARPU) 45% Service CAGR 27% CAGR Note: Minor differences may exist due to rounding
Slide 22: 2Ku: Proprietary Solution That Stands Apart from the Competition
(1) Based on management estimates and include satellites operated by Inmarsat, Viasat, Eutelsat, and Yahsat as of 3/31/2017. We estimate that there are approximately 10 Ka satellites in the world, but due to lack of interoperability between Ka satellite providers, only 2 to 5 can currently be used f
Slide 23: Gogo Installed and Awarded Aircraft as of 3/31/2017
GOGO INSTALLED AND AWARDED AIRCRAFT AS OF 3/31/2017 (1) All figures are as of 3/31/2017. Awarded but not yet installed figures are approximate and differences may exist due to rounding. Note: On May 27, 2016, we entered into a letter agreement with American Airlines whereby American exercised its op
Slide 24: Adjusted EBITDA Reconciliation ($MM)
ADJUSTED EBITDA RECONCILIATION ($MM) 2011 2012 2013 2014 2015 2016 2016 Q2 2016 Q3 2016 Q4 2017 Q1 Net Income (18) (96) (146) (85) (108) (125) (40) (33) (27) (41) Interest Income (0) (0) (0) (0) (0) (2) (0) (1) (1) (1) Interest Expense 1 9 29 33 59 84 18 25 25 27 Income Tax Provision 1 1 1 1 1 1 Dep