Slide 1: 2nd Quarter 2016 Earnings Results
2nd Quarter 2016 Earnings Results Michael Small – Chief Executive Officer Norman Smagley – Chief Financial Officer August 4, 2016 Exhibit 99.2
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: Significant Momentum in Q2 '16
SIGNIFICANT MOMENTUM IN Q2 ‘16 ü ü Considerable progress on Gogo Biz 4G development and launching with Delta Private Jets New Partnership with IBM and The Weather Company ü 2Ku flying on three airlines
Slide 4: Bond Deal Adds Liquidity
BOND DEAL ADDS LIQUIDITY ü ü Closed $525 million bond deal and extended our debt maturities Funds will be used to support 2Ku installs ü Added more than $200M of cash on the balance sheet 2-3 year gross margin payback on 2Ku installs ü (1) Based on current average mainline ARPA as of 6/30/2016. 1
Slide 5: Strong Q2 '16 Financial Results
STRONG Q2 ‘16 FINANCIAL RESULTS ü Q2 ‘16 Adjusted EBITDA was over $14 million, up 33% Y/Y ü Q2 ‘16 revenue was nearly $148 million, up 22% Y/Y (1) Adjusted EBITDA is a non-GAAP measure. See Appendix for a reconciliation to the comparable measure. 1
Slide 6: 2Ku Awards Exceed 1,200
New aircraft awards in Q2 ’16: IAG (British Airways, Iberia, Aer Lingus) Delta American Airlines 2Ku AWARDS EXCEED 1,200 ü Total 2Ku awarded, but not yet installed aircraft, is more than 1,200 ü (1) As of 8/4/2016 1 ü ü ü
Slide 7: Strong Progress on 2Ku
STRONG PROGRESS ON 2Ku ü Successfully completed first factory retrofit on A350 ü Received six STCs including Airbus A319, Boeing 737-800, Airbus A330 and Airbus A340
Slide 8: 2Ku Installation Forecast Is Increased
2Ku INSTALLATION FORECAST IS INCREASED ü Building supply chain to support at least 750 2Ku installs annually ü Expect 2Ku installs of 75-100 in 2016 ü Expect 2Ku installs of 350-450 in 2017
Slide 9: 2Ku Increasing Bandwidth to Aviation
2Ku INCREASING BANDWIDTH TO AVIATION ü 2Ku is performing well, pleased with Netflix streaming on Aeromexico ü Recently introduced a software upgrade that doubled throughput to the seat ü 2Ku performance is expected to improve to over 100 Mbps in 2017
Slide 10: Business Aviation Progress
BUSINESS AVIATION PROGRESS ü ü Gogo Biz 4G on track to launch in 2Q 2017 Delta Private Jets agreement strengthens ties with a key airline partner ü 4G offers enough bandwidth to bring ground-like experience to the BA market, including streaming video ü Partnership with The Weather Company offers pil
Slide 11: Looking Ahead
LOOKING AHEAD ü Focused on installing 2Ku as quickly as possible 2016 2Ku installations of 75 – 100 2017 2Ku installations of 350 – 450 ü Focused on getting Gogo Biz 4G into the market ü Focused on scaling our operating capabilities to support our airline partners
Slide 12: Q2'16 Record Revenue 22% Y/Y Growth
Q2’16 Record Revenue 2 22% Y/Y Growth Q2’16 revenue up 22% Y/Y Service revenue up 26% Y/Y $121 $142 Note: Minor differences exist due to rounding $126 $138 $148
Slide 13: Solid Growth in Q2'16 Adjusted EBITDA
SOLID GROWTH IN Q2’16 Adjusted ebitda 33% Y/Y Growth Q2 ’16 Adjusted EBITDA increased 33% to $14.4 million Q2 ’16 Adjusted EBITDA margin increased to 10% from 9% Y/Y Note: Minor differences exist due to rounding (1) Adjusted EBITDA is a non-GAAP measure. See Appendix for a reconciliation to the comp
Slide 14: CA-NA - Strong Growth in Revenue & Aircraft Online
CA-NA - Strong GROWTH IN Revenue & AIRCRAFT ONLINE 4 19% Y/Y Growth Service revenue driven largely by increases in aircraft online 2,596 Aircraft Online as of 6/30/2016 ~200 net awarded but not yet installed aircraft at end of Q2’16 Aircraft installations: 96 net aircraft installed in Q2 ’16 >1,300
Slide 15: CA-NA – ARPA Growth, Segment Margin Expands
CA-NA – ARPA GROWTH SEGMENT MARGIN EXPANDS ARPA grew to $138K: 14% y/y growth in ARPA excluding aircraft added since the beginning of 2015, primarily regional jets and aircraft with new airline partners Segment profit margin of 20% Note: Minor differences exist due to rounding $135 $135 66% Y/Y Grow
Slide 16: Strong Growth in BA Service Revenue
STRONG GROWTH IN BA SERVICE REVENUE Service revenue increased 36% Y/Y to $32 million Total BA revenue increased 13% Y/Y to $49 million BA equipment revenue decreased to $17 million, consistent with overall BA market 36% Y/Y Growth 55% 13% Y/Y Growth $43.3 Note: Minor differences exist due to roundin
Slide 17: Increased ATG Units Online & Service ARPU Drive Segment Profit Growth
Increased ATG units online & SERVICE ARPU drive segment profit GROWTH ATG units online increased 20%, to nearly 3,800 ATG Service ARPU increased 14%, to over $2,500 per month Segment profit increased 8%, to $19 million Segment profit margin of 39% 20% Y/Y Growth Note: Minor differences exist due to
Slide 18: Continued Growth in CA-ROW Revenue and Aircraft Online
CONTINUED GROWTH IN CA-ROW REVENUE AND AIRCRAFT ONLINE 149% Y/Y Growth 68% Y/Y Growth Note: Minor differences exist due to rounding 249 aircraft online, up 12 Q/Q Near completion of Ku installs with Delta and Japan Airlines Revenue of $5.7 million, double from Q2 ’15
Slide 19: Strong CA-ROW ARPA Growth
STRONG CA-ROW ARPA GROWTH Note: Minor differences exist due to rounding $111 $145 Annualized ARPA grew 30% Y/Y to $145K Awarded but not yet installed aircraft is approximately 500, mostly 2Ku Expect to install majority of awarded aircraft by end of 2018 Segment loss increased to $23.3 million due to
Slide 20: Consolidated Cash CAPEX Q2 '16
Consolidated Cash CAPEX Q2 ’16 Y/Y changes in capital expenditures due primarily to increased 2Ku airborne equipment purchases Note: Minor differences exist due to rounding. Note: Cash CAPEX is a non-GAAP measure. See Appendix for a reconciliation to the most comparable GAAP measure. $17MM Y/Y Incre
Slide 21: Balance Sheet and Bond Deal
ü $509 million of cash on balance sheet at end of 2nd quarter ü One-time $15 million debt extinguishment charge had $0.20 impact on EPS BALANCE SHEET AND BOND DEAL ü Using proceeds from bond deal to support 2Ku rollout, continued global expansion and to retire existing senior debt
Slide 22: Updated Guidance
ü ü Adjusted EBITDA between $55-$65 million ü Installations 2Ku installations: 75-100 in 2016, 350-450 in 2017 CA-NA approximately 300 incremental installations, up from more than 200 CA-ROW ~75 aircraft in 2016, at least 200 in 2017, both consistent with prior guidance UPDATED GUIDANCE ü Cash CAPEX
Slide 23: Q&A
Q&A
Slide 24: Appendix
Appendix
Slide 25: Gogo Installed and Awarded Aircraft as of 6/30/2016
GOGO INSTALLED AND AWARDED AIRCRAFT AS OF 6/30/2016 (1) All figures are as of 6/30/2016. Awarded but not yet installed figures are approximate and differences may exist due to rounding. 5
Slide 26: Adjusted EBITDA Reconciliation ($MM)
ADJUSTED EBITDA RECONCILIATION ($MM) 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 Net Income (20) (25) (29) (34) (24) (40) Interest Income (0) (0) (0) (0) (0) (0) Interest Expense 10 16 17 16 16 18 Income Tax Provision – – – – – – Depreciation & Amortization 19 21 22 25 24 25 EBITDA 9 12 10 8 17
Slide 27: Cash CAPEX Reconciliation ($MM)
CASH CAPEX RECONCILIATION ($MM) 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 Purchases of Property and Equipment (53) (33) (19) (30) (31) (40) Acquisition of Intangible Assets (Capitalized Software) (4) (4) (4) (5) (6) (8) Consolidated Capital Expenditures (57) (37) (24) (35) (37) (48) Change in
Slide 28: Cash CAPEX Guidance Reconciliation ($MM)
CASH CAPEX GUIDANCE RECONCILIATION ($MM) For the year ending 2016 Low High Consolidated capital expenditures (GAAP) (150) (185) Deferred airborne lease incentives 40 50 Cash CAPEX (110) (135) For the year ending 2017 Low High Consolidated capital expenditures (GAAP) (220) (265) Deferred airborne lea