Slide 1: 3rd Quarter 2015 Earnings Results
3rd Quarter 2015 Earnings Results Michael Small – Chief Executive Officer Norman Smagley – Chief Financial Officer November 5, 2015 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: Increased 2015 Profitability & Guidance
INCREASED 2015 PROFITABILITY & GUIDANCE ü ü YTD 2015 Adjusted EBITDA is up 3X from last year to $28.7 million 2015 Adjusted EBITDA guidance is increased to $30-$35 million ü On a path to consolidated profitability
Slide 4: 2Ku: Surpassing Expectations
2Ku: SURPASSING EXPECTATIONS ü ü First truly global broadband highway in the sky Speed tests demonstrate 12+ Mbps to a device even with simultaneous streaming on more than 40 devices ü Eight airline wins for more than 550 aircraft ü 2Ku live television programming
Slide 5: 2Ku: Advantages
2Ku: ADVANTAGES ü ü Proprietary electro-mechanical, phased-array antenna design Much lower bandwidth costs than global Ku or Ka ü Superior global coverage ü Redundancy and capacity of 180 Ku satellites Bigger is better, round is better Conventional Gimbaled Antenna Ku or Ka 2Ku 30 in 30 in
Slide 6: Q3 '15 Update – Commercial Aviation
Q3 ’15 UPDATE – COMMERCIAL AVIATION ü ü 75 commercial aviation aircraft installed between CA-NA & CA-ROW Expect about 1,000 ATG-4 aircraft online by year-end or 40% of CA-NA installed base ü Nearly 2,500 commercial aircraft online - Includes over 860 ATG-4 aircraft online
Slide 7: More Bandwidth Drives More Revenue & ARPA Growth
MORE BANDWIDTH DRIVES MORE REVENUE & ARPA GROWTH ü ü ATG aircraft upgraded to ATG-4: 20% ARPA growth Expect greater ARPA growth from 2Ku ü ATG-4 aircraft upgraded to Ku: 30% ARPA growth
Slide 8: Q3'15 Update – CA-ROW
Q3’15 UPDATE – CA-ROW ü CA-ROW ARPA has surpassed CA-NA ARPA ü Full fleet deployment & 2Ku will drive ARPA growth ü CA-ROW contributing to consolidated revenue growth
Slide 9: Q3'15 Update – Business Aviation
Q3’15 UPDATE – BUSINESS AVIATION ü 38% service revenue growth ü 41% segment profit margin ü Over 3,300 ATG units online ü Segmentation strategy gaining traction ü GogoBiz 4G brings 10Mbps to BA aircraft in 2017
Slide 10: Business Model & Profitability
BUSINESS MODEL & PROFITABILITY ü CA-NA & BA combined segment profit reached record $30 million, up 46% y/y ü Scale is vital in our industry ü Gogo has sufficient scale to achieve consolidated profitability ü Free cash flow for CA-NA & BA combined have been positive for Q3 and year-to-date Note: Refe
Slide 11: Q3'15 Earnings Call Key Highlights
Q3’15 EARNINGS CALL KEY HIGHLIGHTS 2Ku is here - Surpassing expectations - Most efficient global solution - Expect 2Ku to drive aircraft wins 1. More planes and more bandwidth drive revenue growth & profitability 2. Gogo has enough aircraft to achieve consolidated profitability 3.
Slide 12: Q3'15 Record Revenue and CA-NA & BA Segment Profit
Q3’15 Record Revenue AND CA-NA & BA Segment profit 22% Y/Y Growth Q3’15 revenue is up 22% y/y Service revenue up 31% y/y CA-NA + BA segment profit up 46% y/y to $30 million CA-NA + BA segment profit margin 24%, up from 20% in Q3’14 46% Y/Y Growth $121 $109 $104 $116 Note: Minor differences exist due
Slide 13: Q3'15 Adjusted EBITDA Is Up 8x from Q3'14
Q3’15 Adjusted ebitda is up 8x from Q3’14 738% Y/Y Growth Q3’15 Adjusted EBITDA increased 8x to $9.7 million Guidance is increased to $30-$35 million for FY 2015 Combined CA-NA & BA Free Cash Flow Positive in Q3 & YTD Nearly $390 million cash on balance sheet at end of Q3’15 Note: Minor differences
Slide 14: CA-NA – Strong Growth in Revenue & Aircraft Online
CA-NA - Strong GROWTH IN Revenue & AIRCRAFT ONLINE 25% Y/Y Growth Service revenue driven by: 13% y/y growth in aircraft online 12% y/y growth in ARPA 2,312 Aircraft Online 114 aircraft installed 51 aircraft retired ~350 net awarded but not yet installed aircraft at Q3’15 13% Y/Y Growth Note: Minor d
Slide 15: CA-NA – Strong Revenue & ARPA Growth
CA-NA - Strong Revenue & ARPA Growth 12% Y/Y Growth ARPA growth continues: Driven by increase in ARPS Estimated ARPA growth excluding the impact of regional jets would have been approximately 20% Take rate of 5.6% impacted by regional jets, price increases and seasonality Segment profit doubled to $
Slide 16: BA Service Revenue – Continued High Growth
BA SERVICE Revenue – Continued High Growth Service revenue increased 38% y/y to record $26 million Service revenue continues strong growth track record Total revenue reaches new record 38% Y/Y Growth 47% 51% 52% 55% 10% Y/Y Growth $43 $40 $40 $42 Note: Minor differences exist due to rounding $44 59%
Slide 17: Increased ATG Units Online Drive Segment Profit Growth
Increased ATG units online drive segment profit GROWTH ATG units online increased 26%, to more than 3,300 ATG Service ARPU increased 12%, to more than $2,300 Segment profit up 21%, to $18.2 million Segment profit margin 41%, up from 37% in Q3’14 26% Y/Y Growth Note: Minor differences exist due to ro
Slide 18: International Expansion Continues
International Expansion continues 357% Y/Y Growth 160 aircraft online, up 12 q/q CA-ROW ARPA exceeds CA-NA ARPA ~400 awarded and not yet installed at Q3’15 2Ku test results exceed expectations
Slide 19: Consolidated Cash Capex
Consolidated Cash CAPEX Q3 ’15 Y/Y changes in capital expenditures: Decrease in airborne equipment spend Increase in equipment proceeds from airline partners Build-out of the BA office in Q3’14 Purchase of test plane in Q3’14 Y/Y Decrease $18MM Note: Minor differences exist due to rounding.
Slide 20: Strong Financial Results
ü ü Strong Q3’15 financial results Expect strong growth in revenue and profitability going forward supported by aggressive roll out of 2Ku ü Raised 2015 Adjusted EBITDA guidance STRONG FINANCIAL RESULTS
Slide 21: Q&A
Q&A
Slide 22: Appendix
Appendix
Slide 23: Updated 2015 Guidance
Updated 2015 Guidance Revenue$485 - $505 million CA-NA$300 - $320 million BA$170 - $180 million CA-ROW $10 - $15 million Adjusted EBITDA $30 - $35 million Cash CAPEX$100 - $120 million
Slide 24: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION ($MM) 2009 2010 2011 2012 2013 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 Net Income (142) (140) (18) (96) (146) (17) (19) (25) (24) (20) (25) (29) Interest Income (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) Interest Expense 30 – 1 9 29 7 7 9 9 10 16 1
Slide 25: Cash Capex Reconciliation
CASH CAPEX RECONCILIATION ($MM) 2009 2010 2011 2012 2013 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 Purchases of Property and Equipment (69) (33) (33) (67) (105) (32) (28) (35) (37) (53) (33) (19) Acquisition of Intangible Assets (Capitalized Software) (8) (7) (10) (12) (16) (4) (5) (5)