Gogo Inc. · NASDAQ:GOGO
Gogo — Investor Presentation (May 2014)
24 slides from Gogo's investor presentation, May 19, 2014
Slide 1: Investor Presentation May 2014
May 2014 Investor Presentation Exhibit 99.1
Slide 2: Disclaimer: Safe Harbor Statement
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 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 3
Slide 4: Why Invest in Gogo
WHY INVEST IN GOGO Gogo is a leading aircraft communications service provider for the global aviation industry . Our scale position supports superior unit economics, operational excellence, and industry-leading R&D investments. Gogo is a pure play . We are the only telecom company that focuses solel
Slide 5: Gogo Leadership Spans All Market Segments
COMMERCIAL AVIATION NORTH AMERICA BUSINESS AVIATION GLOBAL COMMERCIAL AVIATION REST OF WORLD • > 2,050 aircraft online • > 8,000 daily flights • ~77% market share (1) • > 55 million passenger sessions since service launch • Awards for 332 aircraft: - Delta international - Japan Airlines - AeroMexico
Slide 6: Only Gogo Provides Complete End-to-End Solutions
AIRCRAFT OPERATIONS REGULATORY APPROVAL NETWORK & BANDWIDTH MANAGEMENT CUSTOMER CARE & MARKETING SUPPORT NETWORK ENGINEERING & DESIGN AIRCRAFT CONNECTIVITY SOLUTIONS ENGINEERING COMPLETE BACK-OFFICE INFRASTRUCTURE AND SUPPORT AIRLINE CONNECTIVITY PRODUCTS & SERVICES DEVELOPMENT ONLY GOGO PROVIDES CO
Slide 7: Our Versatile, Proprietary Platform Engages Every Passenger, Aircraft Owner & Operator
Gogo Vision Gogo Signature Services Operations-Oriented Communication Services Gogo Connectivity & Gogo Biz AIRCRAFT OWNERS & OPERATORS PASSENGERS, AIRLINES & MEDIA PARTNERS PASSENGERS Gogo Text & Talk GOGOAIR.COM | 7 GOGOAIR.COM | 7 OUR VERSATILE, PROPRIETARY PLATFORM ENGAGES EVERY PASSENGER, AIRCR
Slide 8: We Pride Ourselves on Our Enduring Partnerships
International North America Original Equipment Manufacturers Fractional Jet Operators COMMERCIAL AVIATION BUSINESS AVIATION WE PRIDE OURSELVES ON OUR ENDURING PARTNERSHIPS (1) (1) Letter of Intent (1) 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 8 Subsidiary of
Slide 9: Strong Incumbent Position
COMMERCIAL AVIATION NORTH AMERICA BROADBAND AIRCRAFT ONLINE (1) BUSINESS AVIATION NORTH AMERICA BROADBAND AIRCRAFT ONLINE (1) GOGO HAS 10X MORE BROADBAND AIRCRAFT THAN THE CLOSEST COMPETITOR (77%) 133 (94%) 2,250 2,056 435 148 STRONG INCUMBENT POSITION Based on management estimates, trade publicatio
Slide 10: Attacking a Large and Expanding Global Opportunity
BUSINESS AIRCRAFT (2) COMMERCIAL AIRCRAFT (1) ATTACKING A LARGE AND EXPANDING GLOBAL OPPORTUNITY North America Rest of World 2.1x 1.4x 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 10 Sources: (1) Derived from Boeing Current Market Outlook 2013 – 2032, excludes: cargo airc
Slide 11: Broadest Array of Connectivity Solutions
Technology Region Peak Speed Key Attributes BROADEST ARRAY OF CONNECTIVITY SOLUTIONS Iridium Global 2.4 Kbps - Primarily telecom service - Low data speeds - Satellite SwiftBroadband Global 432 Kbps - Low data speeds - Satellite Air-to-Ground (EvDo Rev A) Regional 3.1 Mbps - Overnight install - Suits
Slide 12: Aircraft Times Revenue per Aircraft
North America Business Passengers In-Flight Connectivity Global All Passengers Media Partners Aircraft Operators In-Flight Connectivity Gogo Vision Gogo Text Messaging Gogo Signature Services Gogo Operations-Oriented Communications Services AIRCRAFT TIMES REVENUE PER AIRCRAFT YESTERDAY TODAY TOMORRO
Slide 13: Compelling Business Model
SCALE AND EXPERTISE HIGH GROWTH SIGNIFICANT OPERATING LEVERAGE • Strong contribution margins • Highly scalable operating infrastructure • New product offerings expected to generate solid returns • Transition to cash capex-lite model • Strong revenue growth and multiple growth drivers • Growing perce
Slide 14: Financial Review
FINANCIAL REVIEW 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 14
Slide 15: Growing Revenue Drives Profitability
ADJUSTED EBITDA ($MM) REVENUE ($MM) $41 $52 $14 GROWING REVENUE DRIVES PROFITABILITY 73% CAGR $353 $49 $24 CA-ROW Segment Loss ($89) ($45) ($1) $9 $8 Note: Minor differences exist due to rounding. $328 $11 $63 $234 $160 $95 $37 2009 2010 2011 2012 2013 2014 Q1 LTM 2009 2010 2011 2012 2013 2014 Q1 LT
Slide 16: More Aircraft & More Revenue per Aircraft in CA-NA
REVENUE ($MM) AIRCRAFT ONLINE (1) ARPA (000s) MORE AIRCRAFT & MORE REVENUE PER AIRCRAFT IN CA-NA 106% CAGR ~ 3x Increase 4.2x Increase (1) End of period. Annualized Average Revenue per Aircraft 1,811 2,032 2,056 2009 2012 2013 2014 Q1 $24 $84 $101 $110 2009 2012 2013 2014 Q1 $11 $134 $199 $213 2009
Slide 17: Strong Q1 2014 Financial Results Demonstrate Scalability
REVENUE ($MM) SEGMENT PROFIT ($MM) $26 $39 STRONG Q1 2014 FINANCIAL RESULTS DEMONSTRATE SCALEABILITY +35% $96 $71 2013 Q1 2014 Q1 Note: Minor differences exist due to rounding. ($0.4) ($6) ($17) $6 $9 $5 $3 $16 CA-NA BA CA-ROW CA-NA BA CA-ROW Total 2013 Q1 2014 Q1 2014 GOGO INC. AND AFFILIATES. PROP
Slide 18: High-Margin Service Revenue Drives BA Profitability and Cash Flow
ATG AIRCRAFT ONLINE (1) SEGMENT PROFIT ($MM) SERVICE REVENUE ($MM) HIGH-MARGIN SERVICE REVENUE DRIVES BA PROFITABILITY AND CASH FLOW 72% CAGR 103% CAGR ~42x increase (1) End of period. 1,455 2,047 2,250 2009 2012 2013 2014 Q1 $6 $34 $52 $57 2009 2012 2013 2014 Q1 LTM $3 $36 $51 $58 2009 2012 2013 20
Slide 19: Investing for a Decade+ of Growth
REVENUE ($MM) ENGINEERING, DESIGN & DEVELOPMENT ($MM) AS % OF REVENUE GENERAL & ADMINISTRATIVE ($MM) SALES & MARKETING ($MM) INVESTING FOR A DECADE+ OF GROWTH 73% CAGR $37 $328 2009 2012 2013 $234 $23 $35 $50 2009 2012 2013 $28 $49 $69 2009 2012 2013 $28 $26 $31 2009 2012 2013 62% 15% 15% 2009 2012
Slide 20: Evolving Capex Model
CAPITAL EXPENDITURES ($MM) N E T W O R K I N S T A L L GOGO RENTS GOGO PAYS AIRLINE PAYS GOGO BUILDS EVOLVING CAPEX MODEL (1) Cash CAPEX represents capital expenditures net of airborne equipment proceeds received from the airlines. Gross CapEx Cash CapEx (1) $77 $77 $79 $121 $124 $58 $104 $106 2009
Slide 21: Why Invest in Gogo
WHY INVEST IN GOGO Gogo is a leading aircraft communications service provider for the global aviation industry. Our scale position supports superior unit economics, operational excellence, and industry-leading R&D investments. Gogo is a pure play . We are the only telecom company that focuses solely
Slide 22: Appendix
APPENDIX 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 22
Slide 23: Reconciliation of Cash CapEx ($MM)
2009 2010 2011 2012 2013 2014 Q1 RECONCILIATION OF CASH CAPEX ($MM) Purchases of Property and Equipment (69) (33) (33) (67) (105) (32) Acquisition of Intangible Assets (Capitalized Software) (8) (7) (10) (12) (16) (4) Gross CapEx (77) (40) (43) (79) (121) (36) Change in Deferred Airborne Lease Incen
Slide 24: Reconciliation of Adjusted EBITDA ($MM)
2009 2010 2011 2012 2013 2014 Q1 RECONCILIATION OF ADJUSTED EBITDA ($MM) Net Income (142) (140) (18) (96) (146) (17) Interest Income (0) (0) (0) (0) (0) (0) Interest Expense – Income Tax Provision – Depreciation & Amortization EBITDA (91) (106) (49) (60) Fair Value Derivative Adjustments – (59) (10)