Gogo Inc. · NASDAQ:GOGO
Gogo — Investor Presentation (May 2015)
24 slides from Gogo's investor presentation, May 11, 2015
Slide 1: Investor Presentation
May 11, 2015 Investor Presentation Exhibit 99.1
Slide 2: Why Invest in Gogo
LARGE GROWTH OPPORTUNITY HIGH BARRIERS TO ENTRY EXPERIENCE & SCALE LEADING POSITION ATTRACTIVE ECONOMICS WHY INVEST IN GOGO
Slide 3: Market & Company Overview
MARKET & COMPANY OVERVIEW
Slide 4: Aviation Internet Trends
AVIATION INTERNET TRENDS Connected aircraft transform global aviation – the last frontier of internet connectivity Cost, coverage, capacity and reliability are just now reaching critical inflection points Next gen technologies expected to increase speeds from 10 to 100Mbps within 5 years with a comp
Slide 5: A Large and Growing Global Connected Aviation Market
ADDRESSABLE CONNECTED AIRCRAFT Commercial Aviation (“CA”) Business Aviation (“BA”) 2.6x size of CA-NA The connected aircraft industry is worth up to $30 billion (1) (2) 1.4x 2.3x 1.2x CA - North America (“CA-NA”) CA - Rest of World (“CA-ROW”) (1) Source: Boeing Current Market Outlook – 2033, exclude
Slide 6: Gogo's Impressive Scale and Reach
Largest Market Share in CA-NA Largest Market Share in BA #1 Global in-flight connectivity provider Leader in North America and expanding internationally Untapped CA-ROW market (2) (2) (2) GOGO’S IMPRESSIVE SCALE AND REACH 68% of connected aircraft Note: Data based on management estimates, trade publ
Slide 7: Long-Term Partnerships with Our Major Aviation Partners
North America Original Equipment Manufacturers Fractional Jet Operators Commercial Aviation Business Aviation International LONG-TERM PARTNERSHIPS WITH OUR MAJOR AVIATION PARTNERS
Slide 8: Why We Win
Specialize in aviation and telecom Excellent reliability Superior technology & economics End-to-end service provider 1 2 3 4 WHY WE WIN
Slide 9: We Specialize in Aircraft and Have a Track Record of Innovation
1 2 3 4 EXPERTISE IN INTERNET, AVIATION AND TELECOM ATG / ATG-4 2Ku Intellectual Property Other Aviation Innovations WE SPECIALIZE IN AIRCRAFT AND HAVE A TRACK RECORD OF INNOVATION st generation of technology North America coverage nd generation of technology Global coverage 100+ patents globally Le
Slide 10: Gogo's Technology Again Disrupts the Global Aviation Industry
GOGO’S TECHNOLOGY AGAIN DISRUPTS THE GLOBAL AVIATION INDUSTRY ATG-4: North America coverage 2Ku: Global coverage ATG-4 Antenna 2Ku Antenna 70 Mbps at launch, 100 Mbps when spot beam Ku-band satellites are launched Low cost producer – estimated half the bandwidth cost compared to other satellite solu
Slide 11: Largest Technology Portfolio
Technology Region Peak Speed Key Attributes Broadest suite of technologies and full fleet connectivity solutions Proprietary 2Ku technology: higher peak speed (70-100 Mbps) than competitors at half the bandwidth cost ATG / ATG-4: fastest deployment time (overnight) and lightest equipment Iridium Glo
Slide 12: Excellent Reliability
EXCELLENT RELIABILITY 75+ million sessions 7,800+ flights per day 98% + ATG End-to-End System Availability Source: Company information
Slide 13: The Most Complete End-to-End Aviation Service Provider
Operations-focused connectivity services for airlines and crew Dedicated customer support services Network monitoring and bandwidth management Airborne equipment for ATG and satellite Certification, installation, maintenance, etc. Connectivity and wireless entertainment services across a range of pa
Slide 14: Financials
FINANCIALS
Slide 15: Growing Revenue Drives Profitability
$8 $11 $14 $41 $78 $80 62% CAGR GROWING REVENUE DRIVES PROFITABILITY Note: Minor differences exist due to rounding (1) Please see reconciliation of Adjusted EBITDA in appendix Adjusted EBITDA (1) ($MM) $49 CA-ROW Segment Loss Revenue ($MM) $89 Adjusted EBITDA $93 $37 $160 $328 $408 $428 Q1 2015 LTM
Slide 16: CA-NA: Revenue and Segment Profit Growth
11% Margin 102 Q/Q Increase CA - NA: REVENUE AND SEGMENT PROFIT GROWTH Note: Minor differences exist due to rounding (1) We define ARPA as the aggregate service revenue for the annual period divided by the number of aircraft online during that period Revenue ($MM) Annualized ARPA (1) ($000s) Segment
Slide 17: BA: High-Margin Service Revenue Drives Profitability and Cash Flow
186 Q/Q Increase 43% CAGR BA: HIGH-MARGIN SERVICE REVENUE DRIVES PROFITABILITY AND CASH FLOW $26 $156 $159 Equipment Revenue Service Revenue Revenue ($MM) Segment Profit ($MM) Segment Profit Margin Segment Profit ATG Aircraft Online (End of Period) ATG Units Shipped Note: Minor differences exist due
Slide 18: CA-ROW: Focus on International Expansion
116 aircraft online as of 3/31/2015 Near global Ku-band satellite network 2Ku technology selected by 6 airlines for trial or adoption (1) Figures reflect aircraft under non-binding agreements (2) Includes Gogo awarded aircraft as of 5/7/2015 International Aircraft Wins (cumulative) Executing Our Int
Slide 19: Normalized CapEx Model
Capitalized software Airborne equipment Network equipment Over the past two years, Gogo’s Cash CapEx has been stable at ~$100 million Equipment proceeds received from airlines and landlord incentives Cash CapEx (1) NORMALIZED CAPEX MODEL (1) Please see reconciliation of Cash CapEx in the Appendix Gr
Slide 20: Gogo - A Compelling Investment Opportunity
Why Does Gogo Win? Specialize in aviation and telecom End-to-end service provider Superior technology and cost Deliver excellent reliability Focused Strategy Gain global share Grow ARPA Increase bandwidth to aircraft Deliver consistent execution GOGO - A COMPELLING INVESTMENT OPPORTUNITY Gogo is a l
Slide 21: Q&A
Q&A
Slide 22: Appendix
APPENDIX
Slide 23: Adjusted EBITDA Reconciliation ($MM)
2009 2010 2011 2012 2013 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 ADJUSTED EBITDA RECONCILIATION ($MM) Net Income (142) (140) (18) (96) (146) (17) (19) (25) (24) (20) Interest Income (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) Interest Expense – Income Tax Provision – – – – – – Depreciation & Amortizatio
Slide 24: Cash CapEx Reconciliation ($MM)
2009 2010 2011 2012 2013 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 CASH CAPEX RECONCILIATION ($MM) Purchases of Property and Equipment (69) (33) (33) (67) (105) (32) (28) (35) (37) (53) Acquisition of Intangible Assets (Capitalized Software) (8) (7) (10) (12) (16) (4) (5) (5) (3) (4) Consolidated Capi