Gogo Inc. · NASDAQ:GOGO
Gogo — Investor Presentation (November 2016)
23 slides from Gogo's investor presentation, Nov 7, 2016
Slide 1: Investor Presentation
November 8, 2016 Investor Presentation 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: Gogo's Business and Growth Opportunity
GOGO’S BUSINESS AND GROWTH OPPORTUNITY Value-Added In-Flight Broadband Connectivity Passenger Experience Passenger Connectivity & Entertainment Operational Efficiencies Rebooking Travel Baggage Tracker Digitized Attendants Turbulence Avoidance Lower Fuel Costs Maintenance Savings Turbulence Avoidanc
Slide 4: Most Planes and Fastest Growth in the Industry
MOST PLANES AND FASTEST GROWTH IN THE INDUSTRY Gogo CA - Satellite Gogo BA - ATG Gogo CA – ATG (1) Data based on management estimates, trade publications and other public sources as of 9/30/2016 and include both commercial and business broadband connected aircraft (2) YTD Performance is as of 9/30/2
Slide 5: Strong Revenue and Profitability Growth
STRONG REVENUE AND PROFITABILITY GROWTH Note: Minor differences exist due to rounding (1) Please see reconciliation of Adjusted EBITDA in appendix $49 33% CAGR $89 CA-ROW Segment Loss Adjusted EBITDA $113 $24 $135 Revenue ($M) Adjusted EBITDA ($M) (1)
Slide 6: Profitability Path for All Segments
#1 More Bandwidth GOGOAIR.COM | 6 PROFITABILITY PATH FOR ALL SEGMENTS 16% margin 40% margin Note: Revenue and Segment Profit/Loss figures are LTM as of 9/30/16 Note: Aircraft online and aircraft backlog, which refers to aircraft awarded, but not yet installed, are as of 9/30/2016 Note: Note market s
Slide 7: Key Differentiators Drive Industry Leadership
Airline support on four continents 1,000+ annual installations Large and growing STC portfolio KEY DIFFERENTIATORS DRIVE INDUSTRY LEADERSHIP GOGOAIR.COM | 91% BA North American and 53% CA global market share INDUSTRY LEADERSHIP NETWORK TECHNOLOGY PRODUCT & SERVICE PLATFORMS AIRCRAFT OPERATIONS Based
Slide 8: Leading Technology Platforms for All Aircraft
GOGOAIR.COM | 1 Next Gen ATG expected to be available in 2018 and expected to deliver 100 Mbps 2 Global commercial aircraft estimate from Boeing Market Outlook 2016-2035, excluding regional jets 3 Includes North American business jets and turboprops estimate from JetNet iQ Report Q4 2015 and commerc
Slide 9: 2Ku Brings 100+ Mbps Globally in 2017
2Ku BRINGS 100+ Mbps GLOBALLY IN 2017 GOGOAIR.COM | 2015 Early 2017 Today Late 2017 2Ku 2Ku 2Ku 2Ku 1 1 Expected results based on management estimates 25 Mbps 50 Mbps 70+ Mbps 100+ Mbps 1
Slide 10: Next Gen ATG Brings 100+ Mbps to North America in 2018
1 Expected results and availability based on management estimates 1 3 Mbps 10 Mbps 100+ Mbps Uniquely integrates licensed and unlicensed spectrum Leverages existing ground and airborne infrastructure Overnight installation Targeted for smaller aircraft NEXT GEN ATG BRINGS 100+ Mbps TO NORTH AMERICA
Slide 11: Strong 2Ku Momentum
STRONG 2Ku MOMENTUM * 2Ku awards include both signed contracts and letters of intent 2015 Nov 3, 2016 2014 50 500 1,500
Slide 12: Leading Global Operational Capabilities
9/30/16 10/31/16 2017E 2Ku Aircraft Installed 2Ku Installation Lines Days To Install 2Ku Annual 2Ku Install Capacity 2Ku STCs Global Maint. Locations 14 12 8 50 8 33 500+ 40+ < 3 750+ 30+ 45 45 12 3½ 360 10 33 First 2Ku OEM Installation - - LEADING GLOBAL OPERATIONAL CAPABILITIES
Slide 13: Portfolio of Business Aviation Solutions
* Source: JetNet iQ Report Q4 2015 and Gogo estimates as of June 2016 Large Jets ~3,000 Aircraft * * * * PURCHASE MOTIVATION + Bandwidth Applications + GLOBAL: JX/SBB SBB SBB SBB REGIONAL: ATG/4G/ Next Gen ATG ATG/4G/ Next Gen ATG ATG/4G ATG/4G/ Next Gen ATG Medium Jets ~4,000 Aircraft Light Jets ~5
Slide 14: Growing Shareholder Value
Growing Shareholder Value MORE AIRCRAFT Leading market share 1,500 2Ku awards High win rate DECLINING INVESTMENT PER AIRCRAFT ARPA GROWTH MARGIN IMPROVEMENT Rapid 2Ku payback Declining install cost & time Bandwidth growth Additional services Multi-payer More & lower cost bandwidth Installs in CA-ROW
Slide 15: Strategic Priorities
Scale CA-ROW segment to profitability Further reduce 2Ku installation costs Double ARPA by 2021 Achieve free cash flow in 2020 Scale Globally Expand Technology Leadership Grow Shareholder Value 1 2 3 STRATEGIC PRIORITIES (1) (1) Free cash flow is defined as cash flow from operating activities less c
Slide 16: Appendix
Appendix GOGOAIR.COM | 16
Slide 17: CA-NA: Strong Revenue and Segment Profit Growth
Segment Profit ($M) Revenue ($M) 33% CAGR Note: Minor differences may exist due to rounding. For 2011 and 2013 ARPA is based on aircraft online and for 2015 and LTM Q3’16 ARPA is based on aircraft online equivalent. Aircraft Online Annualized ARPA ($k) CA-NA: STRONG REVENUE AND SEGMENT PROFIT GROWTH
Slide 18: CA-ROW: Strong Revenue and Segment Profit Growth
GOGOAIR.COM | 18 CA-ROW: STRONG REVENUE AND SEGMENT PROFIT GROWTH Note: Minor differences may exist due to rounding. For 2011 and 2013 ARPA is based on aircraft online and for 2015 and LTM Q3’16 ARPA is based on aircraft online equivalent. Segment Profit ($M) Revenue ($M) Aircraft Online Annualized
Slide 19: BA: High Margin Service Revenue Drives Profitability
Segment Profit ($M) Revenue ($M) 22% Total CAGR Satellite ATG BA: HIGH MARGIN SERVICE REVENUE DRIVES PROFITABILITY Units Online Monthly Average Revenue Per Unit (ARPU) 44% Service CAGR 26% CAGR Note: Minor differences may exist due to rounding
Slide 20: Ku Ecosystem Provides Large and Growing Global Capacity
KU ECOSYSTEM PROVIDES LARGE AND GROWING GLOBAL CAPACITY (1) Based on estimates by satellite capacity providers Planned Ku Supply Potential Ku Supply Planned Ku Supply Potential Ku Supply 150 250 370 730 1,000 1,050 North American Ku Bandwidth Supply (Gbps) Global Ku Bandwidth Supply (Gbps) (1) (1)
Slide 21: 2Ku: Proprietary Solution That Stands Apart From the Competition
(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 22: Gogo Installed & Awarded Aircraft as of 9/30/2016
GOGO INSTALLED & AWARDED AIRCRAFT AS OF 9/30/2016 Aircraft Online CA-NA CA-ROW Total ATG Aircraft Online 1,102 - 1,102 ATG-4 Aircraft Online 1,513 - 1,513 Ku Aircraft Online - 255 255 2Ku Aircraft Online 14 1 15 Total Aircraft Online 2,629 256 2,885 Awarded But Not Yet Installed Aircraft1 CA-NA CA-R
Slide 23: Adjusted EBITDA Reconciliation ($MM)
ADJUSTED EBITDA RECONCILIATION ($MM) 2011 2012 2013 2014 2015 2015 Q4 2016 Q1 2016 Q2 2016 Q3 Net Income (18) (96) (146) (85) (108) (34) (24) (40) (33) Interest Income (0) (0) (0) (0) (0) (0) (0) (0) (1) Interest Expense 1 9 29 33 59 16 16 18 25 Income Tax Provision 1 1 1 1 1 – – – – Depreciation &