Gogo Inc. · NASDAQ:GOGO
Gogo — Investor Presentation (June 2016)
26 slides from Gogo's investor presentation, Jun 14, 2016
Slide 1: Investor Presentation
June 14, 2016 Investor Presentation GOGOAIR.COM | ©2016 Gogo Inc. and Affiliates. Proprietary & Confidential. 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: Why Invest in Gogo
High revenue growth High operating leverage ~10,000 Uncommitted Aircraft $134,000 Annualized ARPA Global scale Specialize in Connected Aircraft Leading technology WHY INVEST IN GOGO Leading Position, Experience & Scale Large Growth Opportunity Attractive Model Competitive Advantages (1) (1) Global c
Slide 4: Strong Growth and Profitability Trends
STRONG GROWTH AND PROFITABILITY TRENDS Note: Minor differences exist due to rounding (1) Please see reconciliation of Adjusted EBITDA in appendix Adjusted EBITDA(1) ($M) $49 Revenue ($M) 33% CAGR $89 CA-ROW Segment Loss Adjusted EBITDA $113 $24 $121
Slide 5: Profitability Path for All Segments
More Bandwidth GOGOAIR.COM | PROFITABILITY PATH FOR ALL SEGMENTS 14% margin 40% margin $M As of 3/31/2016 Based on company reported results as well as management estimates, trade publications and other public sources as of 3/31/2016 Note: Revenue and Segment Profit/Loss figures are LTM as of 3/31/16
Slide 6: Strong Track Record & Momentum
Global Network Technology Record Financial Results STRONG TRACK RECORD & MOMENTUM Recent Airline Wins Large satellite capacity commitments to Intelsat, SES and OneWeb Next generation modem enables speeds of 400+ Mbps, expected to be available in 2017. Gogo surpassed $500M in revenue in 2015 2Ku awar
Slide 7: American Agreement Is Reached
AMERICAN AGREEMENT IS REACHED GOGOAIR.COM | Completed negotiations with American Airlines on May 27th to continue long term relationship and begin deploying 2Ku technology American diversified its In-Flight Connectivity supplier base to include Gogo, ViaSat and Panasonic Of the currently over 1,000
Slide 8: Significant Growth Opportunities in Aircraft and ARPA
SIGNIFICANT GROWTH OPPORTUNITIES IN AIRCRAFT AND ARPA ARPA Growth ARPA Suite Of Offerings Passenger Crew Aircraft Passenger Connectivity Airline / Owner / Operator Services Connected Aircraft Services More connected aircraft, more applications, more revenue $134k(3) (CA-NA) Global broadband aircraft
Slide 9: On a Mission to Connect Global Aviation
ON A MISSION TO CONNECT GLOBAL AVIATION 237 Aircraft Online 60+ Airline Partner Country Destinations 33 Global Maintenance Locations Teleports Offices Install Locations Maintenance Locations Gogo Partner Destinations 11 Country Installation Sites 6 Offices Worldwide 12 Global Teleport Locations Note
Slide 10: Most Experience and Scale in the Industry
MOST EXPERIENCE AND SCALE IN THE INDUSTRY Global Eagle* Panasonic* Others* Total Gogo Broadband Aircraft Online Gogo BA ATG Aircraft Online Gogo CA Aircraft Online * Data based on management estimates, trade publications and other public sources as of 3/31/2016 and include both commercial and busine
Slide 11: Unparalleled Ability to Add Aircraft
UNPARALLELED ABILITY TO ADD AIRCRAFT 12 global airlines across 4 continents have awarded 1,200+ aircraft to Gogo for 2Ku service Cumulative 2Ku Awarded Aircraft + Note: Business Aviation numbers represent the difference in ATG units online from year to year 2016 Net Installation Guidance 200+ CA NA
Slide 12: Continuous Technology Innovation Enables Strong Economics
Connected Aircraft Peak Speed per Aircraft Mbps CONTINUOUS TECHNOLOGY INNOVATION ENABLES STRONG ECONOMICS BANDWIDTH PRODUCTS & SERVICES CA Connectivity BA Connectivity ARPA Gogo Vision BA Talk & Text Universal Cabin System CA Texting First Global 100+ Mbps Solution ATG ATG-4 Ku 2Ku 2Ku w/ Spot Beams
Slide 13: ATG and Satellite Technologies Address Large Market Opportunity
ATG AND SATELLITE TECHNOLOGIES ADDRESS LARGE MARKET OPPORTUNITY Technology ATG (Air to Ground) Satellite – 2Ku Current State Achieved Scale, Yielding Benefits Game Changing Growth Antenna Coverage North America Global Market Business Jets, Smaller Commercial (i.e. RJs) Commercial Capacity Limited to
Slide 14: 2Ku Best in Class Global IFC Solution
(1) Based on management estimates and include satellites operated by Inmarsat, Viasat, Eutelsat, and Yahsat as of 12/31/2015. 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
Slide 15: The Gogo Advantage
THE GOGO ADVANTAGE GOGOAIR.COM | Customizable and integrated products with airline systems Connected aircraft platforms Top tier customers 6,000+ broadband aircraft Industry leading aircraft connectivity solutions 100+ patents from industry leading R&D Open architecture, reliability and redundancy b
Slide 16: Key Priorities for Gogo
KEY PRIORITIES FOR GOGO Win more aircraft Install backlog ~10,000 uncommitted commercial aircraft globally & growing ~ 16,000 uncommitted business aircraft in North America & growing Develop open communications platforms to enable: Tailored passenger experience Digitized front line employees Improve
Slide 17: Q&A
Q&A GOGOAIR.COM | ©2016 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 18: Appendix
Appendix GOGOAIR.COM | ©2016 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 19: BA: Established Industry Leader
BA: ESTABLISHED INDUSTRY LEADER Founded in 1991 and pioneered air-to-ground connectivity for planes Established OEM and dealer relationships Track record of innovation: Universal Cabin System, Gogo Cloud, Gogo Vision, Text & Talk....4G ATG connectivity expected to be available in 2017 The only equip
Slide 20: BA: High Margin Service Revenue Drives Profitability
Segment Profit ($M) Revenue ($M) 24% Total CAGR Satellite ATG BA: HIGH MARGIN SERVICE REVENUE DRIVES PROFITABILITY Units Online Monthly Average Revenue Per Unit (ARPU) 48% Service CAGR 30% CAGR Note: Minor differences may exist due to rounding
Slide 21: CA-NA: Strong Incumbent Position
CA-NA: STRONG INCUMBENT POSITION 67% market share in North America, awarded aircraft of 230(1) Nearly 50% of installed fleet on ATG-4 with more upgrades coming ~600 Delta aircraft (primarily NA fleet) awarded to 2Ku Strong revenue growth and operating leverage, achieved scale and profitability in 20
Slide 22: CA-NA: Strong Revenue and Segment Profit Growth
Segment Profit ($M) Revenue ($M) 37% CAGR Note: Minor differences may exist due to rounding. For 2011 and 2013 ARPA is based on aircraft online and for 2015 and LTM Q1’16 ARPA is based on aircraft online equivalent. Aircraft Online ARPA ($k) CA-NA: STRONG REVENUE AND SEGMENT PROFIT GROWTH (1) Profit
Slide 23: CA-Rest of World: Gaining Momentum
2Ku is a game changer Global satellite network established to provide international connectivity 2Ku service launched on Aeromexico with “ground-like” performance Gogo is focused on signing airlines and investing for growth CA-REST OF WORLD: GAINING MOMENTUM Overview Airline Wins (1) (1) (1) Letter
Slide 24: Revenue Visibility and Clear Path to Free Cash Flow
Revenue Visibility REVENUE VISIBILITY AND CLEAR PATH TO FREE CASH FLOW Increased utilization of satellite network Global scale Free Cash Flow + Current Awarded Total 2,500 230 2,730 + = 237 600 837 + = NA: ROW: x ATG ARPA x 2Ku ARPA 1,200 = 250 = ATG à 2Ku Grow ARPA Operating Leverage Note: Free cas
Slide 25: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION ($M) 2011 2012 2013 2014 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 Net Income (18) (96) (146) (85) (20) (25) (29) (34) (24) Interest Expense 1 9 29 33 10 16 17 16 16 Income Tax Provision 1 1 1 1 – – – – – Depreciation & Amortization 33 37 56 64 19 21 22 25 24 EBITDA 16 (
Slide 26: Cash Capex Reconciliation
Note: Minor differences may exist due to rounding CASH CAPEX RECONCILIATION ($M) 2011 2012 2013 2014 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 Purchases of Property and Equipment (33) (67) (105) (132) (53) (33) (19) (30) (31) Acquisition of Intangible Assets (Capitalized Software) (10) (12) (16) (17)