Gogo Inc. · NASDAQ:GOGO
Gogo — Investor Presentation (February 2018)
34 slides from Gogo's investor presentation, Feb 27, 2018
Slide 1: Investor Presentation February 2018
Investor Presentation February 2018 Exhibit 99.1
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: Why invest in Gogo: Who we are
Gogo – it is the internet in the sky Why invest in Gogo 4 Attractive unit economics & path to profitability 3 Our competitive advantage 2 Who we are 1
Slide 4: Why invest in Gogo
Why invest in Gogo Leading position, experience & scale Large opportunities for growth Technology leadership Clear path to free cash flow
Slide 5: Executing on our strategy to deliver shareholder value
Executing on our strategy to deliver shareholder value 567 Total 2Ku Aircraft Installations 227 installs in Q4 500+ 2Ku aircraft awards in 2017 ~200 aircraft using HTS satellites in CA-NA Weighted avg. peak speed per aircraft nearly doubled in 2017 Met or exceeded all major 2017 guidance: $699M Reve
Slide 6: Transforming the aviation industry
Transforming the aviation industry 1) As of 12/31/2017 2) Based on management estimates, public filings and trade publications of broadband IFC installations as of 12/31/2017 7,900+ 91% ~50% North America market share in Business aviation2 Broadband aircraft online1 Global market share in Commercial
Slide 7: Embedded in the business aviation ecosystem
Embedded in the business aviation ecosystem 1,000s of individual owner operators 170 Independent dealers 10 Leading OEMs 9 Fractional jet operators Lasting competitive advantage from strong customer, dealer and OEM relationships throughout the industry
Slide 8: Strong track record
Strong track record 2,844 Source: Management Estimates and Analysis through 2/21/18 …And the Largest Awards World’s leading airlines... (including 9 of top 20 airlines) ~40% win rate… Average awarded aircraft per airline account ~200 ~100 Strong track record of winning large aircraft awards with the
Slide 9: Strong and consistent growth
Strong and consistent growth 7,115 7,909 2017 $ $ $ $ 2017 $ $699 $81 $ $ $ $ $ $ $618 $ 1 Aircraft Online (AOL) Aircraft Revenue $M Note: BA excludes Satellite aircraft Note: Minor differences may exist due to rounding Aircraft online drive predictable, high margin service revenue
Slide 10: Significant bandwidth is arriving now
Significant bandwidth is arriving now … Percentage of Aircraft Online by Technology Satellite 50-100+ Mbps ATG-4 10 Mbps ATG 3 Mbps 2016 2017 2018E Approximately 40% of CA aircraft will be 50-100 Mbps by end of 2018 Significant increase in speed Weighted-average peak speed 100+ Mbps Bandwidth increa
Slide 11: 80% of business aviation aircraft need connectivity
20% 80% of business aviation aircraft need connectivity … Source: Q3 2017 NetJetsiQ and management estimates Large jets is inclusive of CA-NA and CA-ROW large jets Business Aviation Addressable Market Aircraft 80% Unaddressed Market 57% 84% 98% 60%
Slide 12: Thousands of commercial aircraft to be connected in next 10 years
and thousands of aircraft to be connected in commercial aviation in the next 10 years Source: 2017 Boeing CMO, Management Estimates and Analysis Commitments to date Commercial Aircraft >40% <10% Connected Commercial Aircraft (projected) 9,000 9,000 10 year growth - 18,000 aircraft CA Market Penetrat
Slide 13: Why invest in Gogo: Our competitive advantage
Gogo – it is the internet in the sky Why invest in Gogo 4 Attractive unit economics & path to profitability 3 Our competitive advantage 2 Who we are 1
Slide 14: Gogo's Inflight Internet Portfolio is why we win
Gogo’s Inflight Internet Portfolio is why we win Hardware Software Gogo Inflight System Gogo Inflight Network ATG SatCom Ground Gogo Support Gogo Inflight Services Connected Aircraft Passenger Account Operations Data
Slide 15: Networks and systems address all aircraft
Networks and systems address all aircraft SMALL LARGE Large Jets (3,000) Medium Jets (3,700) Light Jets (6,800) Turboprops (8,800) BA Market Source: Management Estimates and Analysis, Boeing CMO Regional Jets (2,500) Narrowbody (15,000) Widebody (4,000) CA Market Inflight Network ATG Inflight System
Slide 16: Global satellite network tailored to aviation industry needs
Global satellite network tailored to aviation industry needs Capacity LOW HIGH GOGO Global coverage Multiple satellites offering redundancy everywhere Ability to layer in additional capacity as needed Many HTS satellites launched, more to be launched when and where needed Global coverage, concentrat
Slide 17: Satellite technology strategy drives most bits at lowest cost
Gogo’s satellite technology strategy drives most bits at lowest cost Cost per MB Time Increased Wide Beam supply Hybrid & other constellations Economies of scale / Hosted payloads Inclined orbit satellites Benefits of multi-provider satellite strategy: Low cost Leverage innovation Add capacity on de
Slide 18: ATG-NG to bring high-speed, low cost regional solution
ATG-NG to bring high-speed, low cost regional solution to North America 1 3 Mbps 10 Mbps 100+ Mbps 2008 2018 2012 ATG ATG-4 ATG-NG Tower Upgrades Licensed + unlicensed spectrum Hardware Hardware 100+ Mbps demonstrated in lab in May 2017 Nationwide network build out begun – leveraging towers, backhau
Slide 19: ATG-NG benefits
ATG-NG benefits For $50 million CAPEX: Extends 100+ Mbps speeds to Business Aviation and Regional Jet aircraft Adds 100 Gbps of dedicated capacity Speed 100+ Mbps and growing Size/Cost Lower CAPEX Lighter-weight Overnight install Reliability 99% end-to-end Note: Expected results and availability bas
Slide 20: End-to-end support services drive operational excellence
End-to-end support services drive operational excellence Post Award On-going Support Operation Customer Benefits Leading certification Portfolio Rapid fleet deployment Fastest installations Complete turnkey capability Customer Benefits 98% uptime Rapid issue resolution Scale across nearly 8,000+ air
Slide 21: Why invest in Gogo: Attractive unit economics
Gogo – it is the internet in the sky Why invest in Gogo 4 Attractive unit economics & path to profitability 3 Our competitive advantage 2 Who we are 1
Slide 22: Attractive economics across all aircraft types
Attractive economics across all aircraft types Gogo (as of Q3 2017) Aircraft Type Aircraft Online Annualized ARPA1 Airborne Equipment NPV Business Jets 4,567 $34K Profit $ Regional Jets 1,068 $64K Breakeven $$ Mainline - NA 1,749 $174K Co-investment $$$ ROW 352 $226K Co-investment $$$ Network ATG AT
Slide 23: Will drive growth in profitability for all segments
Will drive growth in profitability for all segments … #1 MORE BANDWIDTH 17% margin 41% margin Note: Note market share is based on installed aircraft from public sources, trade publications, management estimates and other public sources as of 12/31/2017 CA-NA CA-ROW BA 2,840 Aircraft Online 65% Marke
Slide 24: Growth in consolidated profitability
… and growth in consolidated profitability Note: Minor differences exist due to rounding 1 Please see reconciliation of Adjusted EBITDA in appendix Adjusted EBITDA CA-ROW Segment Loss Adjusted EBITDA Profitability of BA and CA-NA results in strong consolidated performance Investing in attractive ROW
Slide 25: Business aviation generates high growth, high margin revenue
Business aviation generates high growth, high margin service revenue and profitability Total Revenue Segment Profit Equipment revenue Service revenue 18% Segment profit CAGR $M $M 34% Service revenue CAGR BA positioned for strong 2018 with significant growth opportunities
Slide 26: Balance sheet improves through operational execution and refinancing
Balance sheet improves through operational execution and refinancing opportunity 1 Please see reconciliation of Adjusted EBITDA in appendix. 2. Senior secured notes and convertible notes balance is shown at par. YTW as of 2/21/2018. 18.0x 6.4x Natural deleveraging through operational execution 2017
Slide 27: On target to reach positive Free Cash Flow in 2019
On target to reach positive Free Cash Flow in 2019 and full year 2020 Revenue growth driven by AOL and ARPA Increased utilization of global satellite network Scale drives operating leverage Reduce interest expense through potential refinancing 1 2 3 4
Slide 28: Why invest in Gogo
Why invest in Gogo Leading position, experience & scale Large opportunities for growth Technology leadership Clear path to free cash flow
Slide 29: Let's go farther
Let’Ss go FARTHER
Slide 30: Appendix
Appendix
Slide 31: Gogo installed and awarded aircraft as of 12/31/2017
Gogo installed and awarded aircraft as of 12/31/2017 Note: Under the Unified Agreement with American Airlines, the airline has the option to terminate our service, and we expect it to exercise such option, on approximately 550 mainline aircraft on which our ATG/ATG-4 service is provided. We currentl
Slide 32: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation ($MM) 2013 2014 2015 2016 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 GAAP Net Income (146) (85) (108) (125) (27) (41) (44) (45) (41) Income Tax Provision 1 1 1 1 0 0 0 0 (1) Interest Income (0) (0) (0) (2) (1) (1) (1) (1) 30 Interest Expense 29 33 59 84 25 27 27 28 (3) De
Slide 33: Cash CapEx reconciliation
Cash CapEx reconciliation ($MM) 2013 2014 2015 2016 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 Purchases of Property and Equipment (105) (132) (135) (148) (41) (64) (65) (62) (62) Acquisition of Intangible Assets (Capitalized Software) (16) (17) (18) (29) (7) (8) (9) (7) (4) GAAP Consolidated Capital E
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