Gogo Inc. · NASDAQ:GOGO
Gogo — Q2 2015 Earnings Presentation
22 slides from Gogo's earnings presentation, Aug 6, 2015
Slide 1: 2nd Quarter 2015 Earnings Results
2nd Quarter 2015 Earnings Results Michael Small – Chief Executive Officer Norman Smagley – Chief Financial Officer August 6, 2015
Slide 2: Safe Harbor Statement
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 current
Slide 3: Executing on Our Global Opportunity
EXECUTING ON OUR GLOBAL OPPORTUNITY Connected aircraft It is real It is big It is underway 70%+ win rate since 2Ku announcement Flying on over 50% of connected commercial aircraft worldwide Note: Based on management estimates as of 6/30/2015 ©2014 Gogo Inc. and Affiliates. Proprietary &
Slide 4: Gogo Leads the Industry
GOGO LEADS THE INDUSTRY Innovative platforms & services Best network solutions Most connected aircraft ©2014 Gogo Inc. and Affiliates. Proprietary & Confidential. 4
Slide 5: Winning Aircraft
WINNING AIRCRAFT Signed definitive agreement with GOL Large full fleet award of 140 aircraft Demonstrates importance of 2Ku in the tropical region GOL selected three products: - in-flight connectivity, - wireless in-flight entertainment, - and Gogo’s newest product: Gogo TV 500+ 2Ku aircraft
Slide 6: Adding More Bandwidth
ADDING MORE BANDWIDTH 2Ku commercial launch is expected by year-end 2015 2Ku wins on cost, coverage, capacity and reliability 2Ku brings more capacity to North America ©2014 Gogo Inc. and Affiliates. Proprietary & Confidential. 6
Slide 7: Hitting Our Numbers
HITTING OUR NUMBERS Q2 2015 Strong Financial Results: Revenue up 22% to $121 million Adjusted EBITDA up 248% to $10.8 million CA-NA + BA combined segment profit up 31% to $29 million ©2014 Gogo Inc. and Affiliates. Proprietary & Confidential. 7
Slide 8: Hitting Our Numbers
HITTING OUR NUMBERS Q2 2015 Strong Operating Performance: Added nearly 300 aircraft online in CA & BA - Average of more than 3 per day CA added ~120 aircraft with Gogo Vision BA shipped 227 ATG units Segmentation strategy gains traction ©2014 Gogo Inc. and Affiliates. Proprietary & Confident
Slide 9: Key Priorities
KEY PRIORITIES Bring 2Ku online Increase bandwidth to unlock ARPA Increase scale advantage ©2014 Gogo Inc. and Affiliates. Proprietary & Confidential. 9
Slide 10: Q2 2015 Record Revenue & Adjusted EBITDA
Q2 2015 RECORD REVENUE & ADJUSTED EBITDA Total Revenue ($MM) $109 $116 $121 $100 $104 $20 $20 22% $20 $22 $20 Y/Y Growth • Q2 2015 record revenue quarter $79 $82 $90 $95 $101 • Service revenue exceeds Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Service Revenue Equipment Revenue $100 million, up 28% y/y Note:
Slide 11: CA-NA Strong Revenue & ARPA Growth
CA-NA STRONG REVENUE & ARPA GROWTH Service Revenue ($MM) $72 $75 $68 $62 $62 22% Y/Y Growth • Service revenue driven by: - 13% y/y growth in ARPA - 9% y/y growth in aircraft online Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 • ARPA growth continues: Annualized ARPA - Changes in pricing $134 $136 - Growth in
Slide 12: CA-NA Aircraft Online & Segment Profit Growth
CA-NA AIRCRAFT ONLINE & SEGMENT PROFIT GROWTH Aircraft Online (End of Period) 2,200 2,249 2,098 9% 2,058 2,044 Y/Y Growth • 105 aircraft installed • 56 aircraft retired by airlines Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Segment Profit ($MM) • Strong operating leverage $12 $11 continues $10 $10 15% $8 74
Slide 13: BA Service Revenue & ATG Aircraft Online Growth
BA SERVICE REVENUE & ATG AIRCRAFT ONLINE GROWTH Service Revenue ($MM) 55% $26 52% 46% 47% 51% $24 30.00 39% • Service revenue increased $22 Y/Y Growth 39% y/y to record $24 million $21 $20 20.00 $19 10.00 $17 $16 - • Service revenue continues Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 strong growth track re
Slide 14: BA Revenue & Segment Profit Growth
BA REVENUE & SEGMENT PROFIT GROWTH ATG Aircraft Online (End of Period) 2,983 3,170 2,797 31% 2,637 Y/Y Growth 2,415 • ATG aircraft online increased 31% y/y to nearly 3,200 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 • ATG service ARPU of $2,200+ Segment Profit ($MM) $18 50% per month $17 $16 $15 $15 45% • Q2
Slide 15: Focus on International Expansion
FOCUS ON INTERNATIONAL EXPANSION Satellite Aircraft Online (End of Period) 148 116 28% 85 Q/Q Growth 35 • Installed 32 Ku-based aircraft 19 • Revenue of $2.3 million, up from Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 $0.3 million in Q2’14 CA-ROW Segment Loss ($MM) • Y/Y decrease in segment loss due $23 to
Slide 16: Consolidated Cash CapEx & Cash Balance
CONSOLIDATED CASH CAPEX & CASH BALANCE Cash CapEx ($MM) Y/Y Decrease $30 $32 $4MM $27 $23 $12 • Q2 ’15 Y/Y changes in capital expenditures: Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Increased airborne equipment proceeds Decreased ATG network spend Cash Balance ($MM) $400 $392 • Strong cash position $243 $1
Slide 17: 2015 Guidance
2015 GUIDANCE Revenue $485 - $505 million CA-NA $300 - $320 million BA $170 - $180 million CA-ROW $10 - $15 million Adjusted EBITDA at higher end of $15 - $25 million Cash CAPEX $100 - $120 million ©2014 Gogo Inc. and Affiliates. Proprietary & Confidential. 17
Slide 18: Strong Q2 Financial Performance
STRONG Q2 FINANCIAL PERFORMANCE Strong service revenue growth Strong operating leverage Growth in profitability ©2014 Gogo Inc. and Affiliates. Proprietary & Confidential. 18
Slide 19: Q&A
Q&A
Slide 20: Appendix
Appendix
Slide 21: Adjusted EBITDA Reconciliation ($MM)
ADJUSTED EBITDA RECONCILIATION ($MM) 2014 2014 2014 2014 2015 2015 2009 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Q2 Net Income (142) (140) (18) (96) (146) (17) (19) (25) (24) (20) (25) Interest Income (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) Interest Expense 30 – 1 9 29 7 7 9 9 10 16 Income Tax Provisi
Slide 22: Cash CapEx Reconciliation ($MM)
CASH CAPEX RECONCILIATION ($MM) 2014 2014 2014 2014 2015 2015 2009 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Q2 Purchases of Property and (69) (33) (33) (67) (105) (32) (28) (35) (37) (53) (33) Equipment Acquisition of Intangible Assets (8) (7) (10) (12) (16) (4) (5) (5) (3) (4) (4) (Capitalized Software)