Slide 1: Investor Presentation November 2013
Investor Presentation November 2013
Slide 2: Disclaimer
DISCLAIMER Safe Harbor Statement This presentation contains “forward-looking statements” that are based on management’s beliefs and assumptions and on information currently available to management. Most forward-looking statements contain words that identify them as forward-looking, such as “anticipa
Slide 3: Business Overview
BUSINESS OVERVIEW 2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 3
Slide 4: Why Invest in Gogo
WHY INVEST IN GOGO PIONEER & LEADER EXPERIENCE & SCALE LARGE GROWTH OPPORTUNITY TECHNOLOGY LEADERSHIP COMPELLING BUSINESS MODEL 2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 4
Slide 5: Gogo Transformed the Flying Experience Forever
GOGO TRANSFORMED THE FLYING EXPERIENCE FOREVER BEFORE GOGO 2006-2008 2009-2013 ~45 Million Sessions 2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 5
Slide 6: Gogo Leadership Spans All Market Segments
GOGO LEADERSHIP SPANS ALL MARKET SEGMENTS COMMERCIAL AVIATION COMMERCIAL AVIATION NORTH AMERICA REST OF WORLD > 2,000 aircraft online Contracts for Delta’s > 7,000 daily flights international fleet and with two foreign carriers ~80% market share(1) Global sales organization established Satellite and
Slide 7: Strong Incumbent Position
STRONG INCUMBENT POSITION GOGO HAS 9X MORE BROADBAND AIRCRAFT THAN THE CLOSEST COMPETITOR COMMERCIAL AVIATION NORTH AMERICA BROADBAND AIRCRAFT ONLINE BUSINESS AVIATION NORTH AMERICA BROADBAND AIRCRAFT ONLINE 78 133 431 2,011 1,847 (80%) (93%) Gogo Global Eagle (Row 44)(1) All Others(1) Gogo All Othe
Slide 8: Industry Leading Experience & Scale Drives Long-Term Success
INDUSTRY LEADING EXPERIENCE & SCALE DRIVES LONG-TERM SUCCESS CERTIFICATIONS & TECHNOLOGY AND INSTALLATIONS PRODUCT INNOVATIONS WORLD-CLASS BANDWIDTH FINANCIAL STRENGTH MANAGEMENT 2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 8
Slide 9: Our Versatile, Proprietary Platform
OUR VERSATILE, PROPRIETARY PLATFORM TRAVELERS, AIRCRAFT TRAVELERS AIRLINES & MEDIA OPERATORS PARTNERS Operations-Oriented Gogo Connectivity Gogo Signature Gogo Vision Communication & Gogo Biz Services Services 2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 9
Slide 10: We Pride Ourselves on Enduring Partnerships
WE PRIDE OURSELVES ON ENDURING PARTNERSHIPS COMMERCIAL AVIATION BUSINESS AVIATION North America Original Equipment Manufacturers International Fractional Jet Operators Subsidiary of 2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 10
Slide 11: Gogo Technology Leadership
GOGO TECHNOLOGY LEADERSHIP $220,000,000 Largest engineering investment since launch(1) > 35 Largest number of aircraft types installed(1) 36% of total headcount Large highly specialized technology staff Track record of technology development and #1 market deployment (1) Based on management estimates
Slide 12: Broadest Array of Technology Solutions
BROADEST ARRAY OF TECHNOLOGY SOLUTIONS Peak Technology Speed Key Attributes -Overnight install Air-to-Ground 3.1 Mbps -All aircraft types (EvDo Rev A) - Limited to North America -Triples the peak speed Air-to-Ground 4 9.8 Mbps -More reliable than ATG (EvDo Rev B) -Overnight install -Global coverage
Slide 13: Gogo Product Leadership
GOGO PRODUCT LEADERSHIP GROUND TO ORBIT GOGO TEXT & TALK GOGO ONEPHONE UNIVERSAL CABIN GOGO VISION FOR BA GOGO CLOUD SYSTEM 2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 13
Slide 14: Attacking a Large and Expanding Global Opportunity
ATTACKING A LARGE AND EXPANDING GLOBAL OPPORTUNITY North America Rest of World COMMERCIAL AIRCRAFT (1) BUSINESS AIRCRAFT (2) 2.1x 36,000 1.4x 27,000 19,000 11,000 17,000 30,000 7,000 13,000 16,000 12,000 4,000 6,000 2012 2032F 2012 2022F Sources: (1) Derived from Boeing Current Market Outlook 2012 -
Slide 15: Growing Revenue Drives Profitability
GROWING REVENUE DRIVES PROFITABILITY REVENUE ($MM) ADJUSTED EBITDA ($MM) $315(1) 85% CAGR $35 $25 $234 $27 $15 $9 $9 ($1) $236 Q3 CA-ROW YTD ($45) Segment Loss $37 $95 $160 ($89) 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Q3 YTD (1)Reflects midpoint of 2013 guidance issued on 11/11/2013 2013
Slide 16: Aircraft Times Revenue per Aircraft
AIRCRAFT TIMES REVENUE PER AIRCRAFT TODAY TOMORROW INCREASE North America Global AIRCRAFT In-Flight Connectivity Gogo Vision Gogo Text Messaging In-Flight Connectivity Gogo Signature Services Gogo Operations-Oriented INCREASE Communications Services REVENUE PER AIRCRAFT All Passengers Business Passe
Slide 17: Compelling Business Model
COMPELLING BUSINESS MODEL HIGH GROWTH SIGNIFICANT OPERATING LEVERAGE HIGH BARRIERS TO ENTRY Strong revenue growth and multiple growth drivers Growing percent of high margin service revenue Transition to lower Cash CAPEX profile Highly scalable operating infrastructure Strong contribution margins Inc
Slide 18: Competitive Advantages Drive International Wins
COMPETITIVE ADVANTAGES DRIVE INTERNATIONAL WINS TURNKEY, FULL SERVICE PROVIDER BEST-IN-CLASS TECH PORTFOLIO COMPELLING USER EXPERIENCE EXPERIENCE AND SCALE Highly scalable operating infrastructure Certification, installation & operational expertise Pricing expertise, marketing support IFC market lea
Slide 19: Financial Review
FINANCIAL REVIEW 2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 19
Slide 20: Growing Revenue Drives Profitability
GROWING REVENUE DRIVES PROFITABILITY REVENUE ($MM) ADJUSTED EBITDA ($MM) $315(1) $35 $25 $27 $15 $9 $9 $95 $160 $234 ($1) $236 Q3 YTD CA-ROW ($45) Segment Loss $37 ($89) 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Q3 (1)Reflects midpoint of 2013 guidance issued on 11/11/2013 YTD 2013 GOGO INC.
Slide 21: More Aircraft & More Revenue per Aircraft in CA-NA
MORE AIRCRAFT & MORE REVENUE PER AIRCRAFT IN CA-NA AIRCRAFT ONLINE ARPA (000s) REVENUE ($MM) ~ 3x 131% 4x Increase (1) $193 $100 CAGR 2,011 Increase 1,811 2,011 $84 $100 $134 $144 692 Q3 $24 YTD $11 2009 2012 2013 Q3 2009 2012 2013 Q3 YTD 2009 2012 2013 YTD Annualized Average Revenue per Aircraft (1
Slide 22: High-Growth, High-Margin Service Revenue Stream Drives BA Profitability
HIGH-GROWTH, HIGH-MARGIN SERVICE REVENUE STREAM DRIVES BA PROFITABILITY ATG AIRCRAFT ONLINE SERVICE REVENUE ($MM) SEGMENT PROFIT ($MM) 1,847 $47 ~38x increase $43 $6 $3 49 1,455 76% CAGR $34 135% CAGR $36 2009 2012 2013 Q3 YTD 2009 2012 2013 Q3 LTM 2009 2012 2013 Q3 LTM 2013 GOGO INC. AND AFFILIATES
Slide 23: Investing for a Decade+ of Growth
INVESTING FOR A DECADE+ OF GROWTH ENGINEERING, DESIGN & GENERAL & ADMINISTRATIVE REVENUE ($MM) SALES & MARKETING ($MM) DEVELOPMENT ($MM) ($MM) $49 $50 $35 $36 85% CAGR $23 $28 $28 $26 $21 $315(1) $234 2009 2012 2013 Q3 2009 2012 2013 Q3 2009 2012 2013 Q3 YTD YTD YTD AS % OF REVENUE 62% 77% 75% $37 1
Slide 24: Evolving CapEx Model
EVOLVING CAPEX MODEL CAPITAL EXPENDITURES ($MM) $125(2) $105(2) $94 $77 $77 $79 $80 $58 2009 2012 2013 Q3 YTD 2013 Gross CapEx Cash CapEx (1) (1) Cash CAPEX represents gross capital expenditures net of airborne equipment proceeds received from the airlines. (2) Reflects midpoint of guidance issued o
Slide 25: Why Invest in Gogo
WHY INVEST IN GOGO PIONEER & LEADER EXPERIENCE & SCALE LARGE GROWTH OPPORTUNITY TECHNOLOGY LEADERSHIP COMPELLING BUSINESS MODEL 2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 25
Slide 26: Appendix
APPENDIX 2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 26
Slide 27: Reconciliation of Cash CapEx ($MM)
RECONCILIATION OF CASH CAPEX ($MM) Q1 Q2 Q3 YTD 2009 2010 2011 2012 2013 2013 2013 2013 Purchases of Property and (69) (33) (33) (67) (29) (29) (24) (83) Equipment Acquisition of Intangible Assets (Capitalized (8) (7) (10) (12) (4) (3) (4) (11) Software) Gross CapEx (77) (40) (43) (79) (33) (33) (28
Slide 28: Reconciliation of Adjusted EBITDA ($MM)
RECONCILIATION OF ADJUSTED EBITDA ($MM) 2009 2010 2011 2012 Q1 2013 Q2 2013 Q3 2013 YTD 2013 Net Income (142) (140) (18) (96) (32) (73) (19) (124) Interest Income (0) (0) (0) (0) (0) (0) (0) (0) Interest Expense 30 1 9 4 10 7 22 Income Tax Provision 3 1 1 1 1 1 1 Depreciation & Amortization 22 31 33