Gogo Inc. · NASDAQ:GOGO
Gogo — Q1 2016 Earnings Presentation
22 slides from Gogo's earnings presentation, May 6, 2016
Slide 1: 1st Quarter 2016 Earnings Results
1st Quarter 2016 Earnings Results Michael Small – Chief Executive Officer Norman Smagley – Chief Financial Officer May 6, 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: Strong Start to 2016
STRONG START TO 2016 ü ü Record adjusted EBITDA of $14.5 million, up 76% Y/Y 2Ku has officially taken flight ü 2Ku flying on Aeromexico ü Record revenue of $142 million, up 23% Y/Y
Slide 4: Massive 2Ku Momentum
MASSIVE 2Ku MOMENTUM ü ü IAG announcement yesterday to connect British Airways, Iberia, and Aer Lingus with 2Ku Extended relationship with Air Canada to install 2Ku on entire wide-body international fleet ü Partnering with Shareco to install 50 2Ku systems on Hainan and Capital Beijing airlines Delt
Slide 5: Developments Impacting 2Ku
DEVELOPMENTS IMPACTING 2Ku ü ü Secured large capacity commitments with Intelsat and SES Announced new modem capable of delivering 400 Mbps that gives Gogo plenty of room for growth ü Ability to leverage OneWeb’s LEO constellation expected to provide significant advantages in coverage and latency 2Ku
Slide 6: Aircraft-Centric Approach
AIRCRAFT-CENTRIC APPROACH ü ü Great progress on the increasing volume of STC’s; Gogo on track to exceed 75 2Ku installations in 2016 Installed or upgraded more than 500 aircraft in CA and BA in Q1, a quarterly record ü Signed agreements with Airbus & Boeing to install 2Ku on A350 and 787 aircraft ü
Slide 7: Business Aviation Progress
BUSINESS AVIATION PROGRESS ü ü Gogo Biz 4G is flying on our test lab Record quarterly profit of $20 million ü Customers are provisioning planes for 4G’s commercial launch in 2017
Slide 8: Firing on All Cylinders
FIRING ON ALL CYLINDERS ü 2Ku now in commercial service ü 2Ku awards have exceeded 1,000 aircraft ü Continued strong financial and operating results
Slide 9: Q1'16 Record Revenue and CA-NA & BA Segment Profit
Q1’16 Record Revenue AND CA-NA & BA Segment profit 23% Y/Y Growth Q1’16 revenue is up 23% Y/Y Service revenue up 24% Y/Y CA-NA + BA segment profit up 29% y/y to $34 million CA-NA + BA segment profit margin 25% 29% Y/Y Growth $121 $142 $116 Note: Minor differences exist due to rounding $126 $138
Slide 10: Q1'16 Record Adjusted EBITDA
Q1’16 RECORD Adjusted ebitda 76% Y/Y Growth Q1’16 Adjusted EBITDA increased 76% to $14.5 million Note: Minor differences exist due to rounding
Slide 11: CA-NA - Strong Growth in Revenue & Aircraft Online
CA-NA - Strong GROWTH IN Revenue & AIRCRAFT ONLINE 16% Y/Y Growth Service revenue driven largely by increases in aircraft online 2,500 Aircraft Online as of 3/31/2016 130 aircraft installed in Q1 ’16 ~1,200 ATG-4 aircraft online as of 3/31/2016 Record quarter for ATG-4 installs or upgrades ~230 net
Slide 12: CA-NA – ARPA Consistent, Segment Margin Expands
CA-NA – ARPA CONSISTENT SEGMENT MARGIN EXPANDS ARPA consistent at $134K: 15% y/y growth in ARPA excluding aircraft added since the beginning of 2015, primarily regional jets and aircraft with new airline partners, and a Gogo Vision launch promotion in Q1 ‘15 Expect modest ARPA growth in 2017 and acc
Slide 13: BA Revenue Continues High Growth
BA Revenue Continues High Growth 3 Service revenue increased 41% Y/Y to $31 million Total BA revenue eclipsed $50 million in a quarter for the first time 41% Y/Y Growth 52% 55% 21% Y/Y Growth $43.3 $41.6 Note: Minor differences exist due to rounding $44.2 59% 58% $49.6 $50.1 61%
Slide 14: Increased ATG Units Online & Service ARPU Drive Segment Profit Growth
Increased ATG units online & SERVICE ARPU drive segment profit GROWTH ATG units online increased 23%, to nearly 3,700 ATG Service ARPU increased 15%, to almost $2,500 per month Segment profit up 20%, to $20 million Segment profit margin of 40% 23% Y/Y Growth Note: Minor differences exist due to roun
Slide 15: Strong Progress Internationally
STRONG PROGRESS INTERNATIONALLY 104% Y/Y Growth 237 aircraft online, up 35 Q/Q Revenue of $4.6 million for Q1’16, up three-fold from Q1’15 Awarded but not yet installed aircraft is up to 600+, mostly 2Ku Expect to install majority by end of 2018 Segment loss increased to $19.7 million, flat sequenti
Slide 16: Consolidated Cash CAPEX
Consolidated Cash CAPEX Q1 ’16 Y/Y changes in capital expenditures: Lower airborne equipment purchases Lower spend on headquarter buildout Y/Y Decrease $8MM Note: Minor differences exist due to rounding.
Slide 17: Balance Sheet
ü $313 million of cash on balance sheet ü Q1 cash used is consistent with full year expectations BALANCE SHEET ü As expected, Q1 had higher payments and an additional principal payment under our credit facility
Slide 18: In Summary
ü Strong financial performance ü Momentum is building for 2Ku IN SUMMARY ü Strong tailwind for continued growth in revenue and profitability
Slide 19: Q&A
Q&A
Slide 20: Appendix
Appendix
Slide 21: Adjusted EBITDA Reconciliation ($MM)
1 ADJUSTED EBITDA RECONCILIATION ($MM) 2009 2010 2011 2012 2013 2014 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 Net Income (142) (140) (18) (96) (146) (85) (20) (25) (29) (34) (24) Interest Income (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) Interest Expense 30 – 1 9 29 33 10 16 17 16 16 Income Tax Prov
Slide 22: Cash CAPEX Reconciliation ($MM)
CASH CAPEX RECONCILIATION ($MM) 2009 2010 2011 2012 2013 2014 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 Purchases of Property and Equipment (69) (33) (33) (67) (105) (132) (53) (33) (19) (30) (31) Acquisition of Intangible Assets (Capitalized Software) (8) (7) (10) (12) (16) (17) (4) (4) (4) (5) (6) C