Gogo Inc. · NASDAQ:GOGO
Gogo — Investor Day (June 2015)
158 slides from Gogo's investor day presentation, Jun 25, 2015
Slide 1: Welcome: Analyst and Investor Day 2015
Welcome Analyst and Investor Day 2015
Slide 2: and Affiliates. Proprietary & .
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 3: Devices proliferated, taxing wireless networks everywhere
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. ©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 4: 2Ku: the best to market second generation solution
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. ©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 5: We expect 2Ku planes to be flying this year
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. ©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
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©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. ©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
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©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. ©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
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©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. ©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
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©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 10: Video
Video 1
Slide 11: Beneficiaries of connectivity
Beneficiaries of connectivity Industries Projected connected aircraft industry revenue* Airline Commercial Jet $30 billion Aircraft Engines Avionics
Slide 12: and Affiliates. Proprietary & .
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
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©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
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©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 17: and Affiliates. Proprietary & .
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. Source: USDOT 2014 Bureau of Transportation Statistics, Chicago Tribune 3/4/2014, Boeing Aero 2009 Readership Survey
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©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 19: and Affiliates. Proprietary & .
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
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©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 21: and Affiliates. Proprietary & .
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 22: and Affiliates. Proprietary & .
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 23: and Affiliates. Proprietary & .
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 24: and Affiliates. Proprietary & .
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
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Slide 26: and Affiliates. Proprietary & .
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
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Slide 29: Many aircraft
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Slide 30: and Affiliates. Proprietary & .
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 31: and Affiliates. Proprietary & .
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 32: 500+ aircraft for 2Ku to date
ommitment @ mee 500+ aircraft for 2Ku to date ail x é -% ; “ “* a | ae
Slide 33: and Affiliates. Proprietary & .
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
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©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 35: and Affiliates. Proprietary & .
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 36: Delivering on our commitments
Delivering on our commitments Jon Cobin Anand Chari Ash ElDifrawi Executive Vice President Executive Vice President and Chit Commercial orcer Chet Technology Officer Winning airlines Soe oe Growing revenue pee and enabling the ee connected aircraft John Wade Norman Smagley Executive Vice President C
Slide 37: Winning Aircraft
Winning Aircraft Jon Cobin Executive Vice President, Global Airline Business Group ©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 38: Gogo has the industry's leading track record
Gogo has the industry’s leading track record ATG 2008 ATG 2010 2Ku, GGV 2013 ATG 2008 ATG 2009 ATG 2008 ATG 2011 ATG 2010 ATG, GGV 2011 GGV 2011 Ku, ATG4, GGV 2012 ATG4, GGV 2012 ATG4 2013 Ku 2013 GGV 2014 ATG, ATG4 2014 ATG4 2014 ATG4 2014 GX 2014 2Ku 2014 2Ku 2015 2Ku, GGV, IPTV 2015 GGV 2014 ©201
Slide 39: Leading the global market
Leading the global market GOGOAIR.COM | 51% MARKET SHARE INSTALLED AIRCRAFT, GLOBAL 74% WIN SHARE SINCE 2Ku ANNOUNCED, GLOBAL *Gogo estimates as of 6/22/15 * * ©2015 Gogo Inc. and Affiliates. Proprietary & Confidential.
Slide 40: Bigger than all our competitors combined
Bigger than all our competitors combined Other Global Installed Aircraft Alliance Commitments (Percent of total commitments) 68% 80% 29% *Gogo estimates as of 6/22/15 ©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. 1% 7% 9% 14% 19% 51%
Slide 41: The leading deals in the industry
The leading deals in the industry GOGOAIR.COM | 42 Wins since 2Ku announcement in April 2014 * Number of Aircraft *Gogo estimates as of 6/22/15 Gogo Competitors
Slide 42: Meeting airlines' needs: Agenda
Meeting airlines’ needs Gogo’s unique strengths The market moving forward Agenda
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Slide 44: Benefits Enabling the Connected Aircraft
Benefits Enabling the Connected Aircraft A transformative opportunity for airlines Airline differentiation Better passenger experience - less cost Direct revenue opportunities Operational efficiency Enhanced safety
Slide 45: Managing complexity so airlines benefit with ease and reliability
Managing complexity so airlines benefit from connected aircraft with EASE and RELIABILITY Requires a different type of partner GOGOAIR.COM | 46 Best performance, complete solutions, most cost efficient and most reliable Unique experiences, brand/business goals Dedicated support: operations, marketin
Slide 46: Only Gogo has the end-to-end capabilities to meet airlines' needs
Only Gogo has the end-to-end capabilities to meet airlines’ needs Systems & Services Taking care of airlines Connectivity technology With unique, end-to-end capabilities *Gogo estimates as of 6/22/2015 IFE Providers Satellite Providers Content providers
Slide 47: Agenda
Meeting airlines’ needs Gogo’s unique strengths The market moving forward Agenda
Slide 48: Gogo's unique strengths
Letting airlines be themselves End-to-end service provider GOGO Gogo’s unique strengths Multi-generational technology leadership Unique experiences, brand/business goals Support: operations, marketing, business models Connectivity Technology Systems & Services Taking Care of Airlines Best performanc
Slide 49: Getting technology right matters
Gogo won the first generation Cumulative IFC Installs – US Market Getting technology right matters GOGOAIR.COM | 50 Others *Gogo estimates as of 6/22/2015 * 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014
Slide 50: Getting technology right matters
Cumulative IFC Installs – US Market Gogo won the first generation Getting technology right matters GOGOAIR.COM | 51 Others UNINSTALLED * *Gogo estimates as of 6/22/2015 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014
Slide 51: The 2Ku advantage
2Ku was designed to eliminate the trade-offs The 2Ku advantage GOGOAIR.COM | *Gogo estimates as of 6/22/2015 Regional and global fleets Cost and capacity of regional Ka Fully redundant, global coverage Dedicated capacity to aero Internet + IPTV in one system The most aerodynamic and bird strike tole
Slide 52: Gogo is winning the second generation
Gogo is winning the second generation All Awards Only Satcom Awards Aircraft wins since 2Ku announcement 58% 13% 21% 11% 18% 2% 2% 74% 0% 0% 0% 0% *Gogo estimates as of 6/22/15 * *
Slide 53: Gogo's unique strengths
GOGO Multi-generational technology leadership End-to-end service provider Gogo’s unique strengths Best performance, complete solutions, most cost efficient and most reliable Letting airlines be themselves Unique experiences, brand/business goals Support: operations, marketing, business models Connec
Slide 54: Bandwidth is necessary, but not sufficient
Gogo Connectivity Has Powered … Bandwidth is necessary, but not sufficient Mobile devices IFE systems Laptops, tablets Custom portals Partner applications
Slide 55: A natural extension of our airline customers' digital strategies
A natural extension of our airline customers’ digital strategies Letting airlines be themselves Branding opportunities Amenities for high value customers New ability for 1:1 communications
Slide 56: Delta Air Lines Portal
Delta Air Lines Portal
Slide 57: American portal
American’ gege mar nrenner (= ENTERTAINMENT Free from American a) Sa Featured on this flight GILT Access Gilt for Free Your Secret Weapon for Business Travel
Slide 58: Portal sign in
SIGN IN they encounter menagerie Scb-Fi View All
Slide 59: Welcome to Delta Studio
Welcome to Delta Studio™ STUDIO
Slide 60: Gogo's unique strengths
GOGO Multi-generational technology leadership Letting airlines be themselves Gogo’s unique strengths Unique experiences, brand/business goals End-to-end service provider Support: operations, marketing, business models Connectivity Technology Systems & Services Taking Care of Airlines Best performanc
Slide 61: Taking care of airlines
Launching New Airline Customers Supporting Existing Airline Customers Success requires a service provider skillset – partnering closely with airlines every day Dedicated program management Launch team Certification and installation Network configuration Customized services & portal Dedicated account
Slide 62: Gogo is recognized as a leader globally
Gogo is recognized as a leader globally 61% * YOY increase in consideration Facing airlines globally … *Source: Gogo Global Airline Survey November 2014 Gogo presence 63% * of airlines consider Gogo for IFC/IFE needs
Slide 63: Agenda
Meeting airlines’ needs Gogo’s unique strengths The market moving forward Agenda
Slide 64: Market needs may vary, but the skillset required is the same
Market needs may vary, but the skillset required is the same North American Airlines IFC experience Capacity expansion Service expansion – Internet – Entertainment – Operations Rest of World Airlines No IFC experience Dissatisfied with prior trials High interest, but confused The state of the market
Slide 65: The global commercial aircraft market
North America 6,200 Latin America 1,000 Europe, CIS 5,100 Middle East, Africa 1,900 Asia Pacific 5,000 The global commercial aircraft market Source: Boeing Current Market Outlook 2014-2033, excludes cargo aircraft
Slide 66: The premier awards in the industry
The premier awards in the industry Selected Recent Awards 2Ku, GGV 2014 GX 2014 2Ku 2014 2Ku 2015 2Ku, GGV, IPTV 2015 Excellent momentum 2Ku, IPTV, Gogo Vision Twin and single aisle Retro and line fit
Slide 67: Positioned to win
Positioned to win Leveraging Gogo’s unique strengths to meet the needs of airlines and connected aircraft
Slide 68: Delivering More Bandwidth
Delivering More Bandwidth Anand Chari Executive Vice President & Chief Technology Officer
Slide 69: The Right Technology: Agenda
The Right Technology Equipping the Aircraft Being a Trusted Aero Communications Service Provider Agenda
Slide 70: Multi-generational technology framework
Multi-generational technology framework 1996 2001 2006 2011 2016 2018 SDSL FTTH VDSL2 GPON VDSL ADSL2+ EDGE HSPA HSPA Evolved LTE Advanced GSM GPRS UMTS HSDPA HSUPA LTE Communication technology evolves Bandwidth demand expands rapidly Fixed networks Mobile networks
Slide 71: Proven research and development track record
Proven research and development track record Gogo’s technology leadership 1996 2001 2006 2011 2016 2018 SDSL FTTH VDSL2 GPON VDSL ADSL2+ EDGE LTE Advanced GSM GPRS UMTS HSDPA LTE ATG ATG-4 2Ku Spot beam Next Gen ATG Ku Ka Critical factors driving our technology Cost Coverage Capacity Reliability Aer
Slide 72: Broadest suite of technologies and full fleet connectivity solutions
Broadest suite of technologies and full fleet connectivity solutions A suite of solutions to serve the global aero market Global Regional ATG 3.1 Mbps Iridium 2.4 Kbps 2Ku 70-100 Mbps Ka 30-50 Mbps Ku 30-50 Mbps Swift Broadband Kbps Next Gen ATG 100+ Mbps ATG4 9.8 Mbps
Slide 73: Ground breaking innovations made broadband connectivity possible
1 Generation 2 Generation 3 Generation st nd rd Ground breaking innovations made broadband connectivity possible 1st economically viable connectivity solution Unique advantages: – Low cost – Highly scalable – Light weight – Overnight installation In-flight broadband connectivity becomes reality ATG
Slide 74: First generation powers up North America
2009 2010 2011 2012 2013 2014 Q1 2015 CA-NA BA 5,200 broadband aircraft connected in 6 years 20 million flight hours of experience Most scale and experience in delivering broadband connectivity First generation powers up North America 1,374 2,205 3,266 4,079 4,895 5,183 ATG Connected Aircraft
Slide 75: Second generation disrupts global aviation
1st Generation 2nd Generation 3 Generation rd 1st economically viable global connectivity solution Only technology that excels across all five critical factors Global internet & IPTV Record market adoption Second generation disrupts global aviation ATG ATG4 2008 2012 2015 2018e 2Ku
Slide 76: 2Ku: size and shape matters
30 in Antenna Size and Shape Drive Performance 2Ku: size and shape matters 2Ku Designed Specifically to Maximize Performance Efficiency 2Ku Traditional Gimbaled Aperture 8 in 29 in 0 skew angle 90 skew angle Elevation Angle Typical Aero Antenna 2Ku (30in VICTS)
Slide 77: No single point of failure
No single point of failure No skew angle issues Compatible with current and future satellites 2Ku outperforms standard antennas in over 98% of flight minutes
Slide 78: 2Ku superior aerodynamic performance and reliability
2Ku superior aerodynamic performance and reliability 6.7 inches >13 inches Low profile radome equates to low aero dynamic drag Fewer moving parts: no stepper motors, gears, belts or pulleys 2Ku Radome Traditional Radome
Slide 79: 2Ku: Only global technology that leads across all factors
2Ku – Only global technology that leads across all 5 factors Coverage – True global coverage Aero performance – Low profile, low fuel burn Cost - 50% cost advantage Capacity – ~ 180 satellites today; HTS satellites coming Reliability – Fewer moving parts, satellite redundancy *As of June 2015 *
Slide 80: 2Ku advantages result in wins
Record Adoption In 15 Months On Schedule For Deployment 2Ku advantages result in wins FCC regulatory approval obtained 2Ku radome certified Summer launch expected on our 737 Commercial launch expected by end of 2015 airlines continents North America, South America, Europe, Asia
Slide 81: Gogo continues to innovate
1st Generation 2nd Generation 3 Generation rd Gogo continues to innovate Next Gen ATG ATG ATG4 2008 2012 2015 2018e 2Ku Ground-like bandwidth at a fraction of satellite costs Capacity solution for North America Leverages ATG network and operational experience
Slide 82: Uniquely positioned to develop and deploy next gen ATG solution
Uniquely positioned to develop and deploy next gen ATG solution 3 Generation - Next Gen ATG Over 2,200 ATG aircraft with easy upgrade path to Next Gen ATG Time-to-Market ATG patents & intellectual property Lowest Cost Implementation Minimal cell site build out Operational Experience Experienced ATG
Slide 83: The Right Technology: Agenda
The Right Technology Equipping the Aircraft Being a Trusted Aero Communications Service Provider Agenda
Slide 84: Most experience in retrofitting aircraft
Business Aviation Retrofits Commercial Retrofits Gogo Vision Systems Installed STCs – Types of Fleets Installation Times Most experience in retrofitting aircraft Retrofitting is not easy, but we do it very well… GOGOAIR.COM | 3,000 2,300+ 2,000+ 75+ 8 hours for ATG < 3 days for Ku
Slide 85: Strong progress on line-fit
Strong progress on line-fit 2Ku and other satellite solutions progressing for Boeing 787, 737 & 777 and Airbus A350 ATG4 provisions offerable on Boeing 737 today The right technology is crucial
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Slide 87: The Right Technology: Agenda
The Right Technology Equipping the Aircraft Being a Trusted Aero Communications Service Provider Agenda
Slide 88: What it means to be a service provider
What it means to be a service provider Custom portals Billing Roaming Airline CRM Interface Monetization E-commerce In-flight problem resolution Live chat Multiple languages Maintenance hubs Operations support systems Network operations center Network Access Integration Reliability Customer Support
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Slide 90: Delivering on our priorities over the next 12 months
Launch 2Ku with our current customers R&D for next gen ATG technology Advance operational excellence Delivering on our priorities over the next 12 months Continue to deliver more bandwidth around the world
Slide 91: Growing Revenue & Enabling the Connected Aircraft
Growing Revenue & Enabling the Connected Aircraft Ash ElDifrawi Chief Commercial Officer
Slide 92: Agenda
Passenger Connectivity New Product Update Airline Solutions and Services Operational Applications Agenda
Slide 93: Expanding services to meet airline needs driving strong revenue growth
Passenger Crew Aircraft New Products Airline Solutions and Services Operational Applications Passenger Connectivity Expanding services to meet airline needs driving strong revenue growth Gogo Suite of Offerings
Slide 94: ARPA showing strong growth even in the face of capacity constraints
2012 2013 2014 2015 Balancing revenue growth with customer experience and network performance ARPA showing strong growth even in the face of capacity constraints $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 0% 4% 8% 12% 16% 20% 24% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Take Rate % Average Monthly
Slide 95: Airline revenue management applied to telecom
Airline revenue management applied to telecom Customized merchandizing engine Distribution strategy focused on increasing yield, not usage Sophisticated revenue management is key driver for near-term growth
Slide 96: Agenda
Agenda Passenger Connectivity New Product Update Airline Solutions and Services Operational Applications
Slide 97: New product revenue is meaningful and growing
83% 17% Revenues include GGV, text, custom portals, etc. 93% 7% Breakdown of CA-NA Service Revenue New product revenue is meaningful and growing 2012 Q1 2015 New Products Connectivity
Slide 98: Gogo Vision experiencing explosive growth
2014 2015 36.8 % * Over 2,000 aircraft installed Multiple new GGV innovations launches in last 18 months GGV demonstrating high engagement with the leisure traveler Gogo Vision experiencing explosive growth Aug Sep Oct Nov Dec Jan Feb Mar Month to Month GGV Usage * Compounded Monthly Growth Rate
Slide 99: Creating a platform that enables a broad range of texting options
Creating a platform that enables a broad range of texting options T-Mobile deal still going strong OTT products coming soon Re-launching our text app Gogo building a suite of messaging products to reach all the ways people text
Slide 100: Gogo expanding entertainment options with Gogo TV
Announced first partnership with GOL Gogo TV brings live television programming to passengers’ own Wi-Fi enabled devices Most IPTV friendly solution with the launch of 2Ku Channels customized by airline Gogo expanding entertainment options with Gogo TV
Slide 101: Agenda
Agenda Passenger Connectivity New Product Update Airline Solutions and Services Operational Applications
Slide 102: Serving as the platform for...
Serving as the platform for… Our robust capabilities meet airline needs and lay the foundation for the future Airline Customization at Scale & Connected Aircraft Controlled internet access Flexible API’s and SDK’s Ad Serving Technology Stack Live Chat and Customer Care Merchandizing engine Real time
Slide 103: Under the hood: Gogo's custom portals
NYC to LA Under the hood: Gogo’s custom portals are much more than a slick design Demand based pricing powered by merchandizing engine Targeted custom content powered ad-technology stack
Slide 104: Under the hood: Gogo's custom portals
Under the hood: Gogo’s custom portals are much more than a slick design Controlled internet access powered by dynamic white listing
Slide 105: Delta Studio taking full advantage of GGV's newest innovations
Delta Studio taking full advantage of GGV’s newest innovations Differentiated experiences powered by Seat Validation Technology Delta Mobile App powered by DRM-friendly SDK
Slide 106: Airlines responding to Gogo's flexible and customizable IFE capabilities
Airlines responding to Gogo’s flexible and customizable IFE capabilities Customizable Turnkey Unplugged IFE
Slide 107: Agenda
Agenda Passenger Connectivity New Product Update Airline Solutions and Services Operational Applications
Slide 108: Operational applications set to take off
Operational applications set to take off and Gogo is well positioned Four Components to the Connected Aircraft
Slide 109: Inflight service applications are already making a difference
Enablers Gogo Projects Inflight service applications are already making a difference Cabin Crew Enablement 81% (1) of airlines are expected to either trial or have cabin crew tablet strategies by end of 2017 Connectivity provides crew with access to CRM data and improves service (1) Source: SITA 201
Slide 110: Flight operations applications will foster greater flight efficiencies
Enablers Gogo Projects Flight operations applications will foster greater flight efficiencies Operational Efficiencies Major airlines have already deployed Electronic Flight Bags including American Airlines Fuel savings and optimization opportunities API Integration Quality-of-Service Weather trial
Slide 111: Maintenance applications will save airlines time and money
Enablers Gogo Projects Constant Connectivity Access to Aircraft Server Gogo Ramp Connect Maintenance applications will save airlines time and money Predictive Capabilities Transformative monitoring and response capabilities Integrated on-ground and in-air collaborative elements Linking the maintenan
Slide 112: Aircraft system apps drive greater aircraft health
Enablers Gogo Projects Aircraft system apps drive greater aircraft health Big Data Capabilities Health monitoring is expected to be a $3.3B (1) industry by 2020 Aircraft can generate GBs of data every flight Connectivity enables context and timeliness Aircraft Data Network Integration Aircraft Appli
Slide 113: More capacity and the Internet of Air will bend the ARPA curve
Passenger Crew Aircraft New Products Airline Solutions and Services Operational Applications Passenger Connectivity More capacity and the ‘Internet of Air’ will bend the ARPA curve Gogo Suite of Offerings Internet of Air
Slide 114: Growing Business Aviation
Growing Business Aviation John Wade Executive Vice President & General Manager, Business Aviation
Slide 115: Agenda
Agenda 3Ps of Connectivity Segmenting and Connecting Aircraft Progress and Strategy
Slide 116: It's about connecting everything: the 3Ps of connectivity
It’s about connecting everything The 3Ps of connectivity connecting the pilot TODAY the pilot 3,000 broadband Gogo Biz YESTERDAY the passenger connecting everyone and everything TOMORROW the plane
Slide 117: Jet owners use the internet just as airline passengers do
Jet owners use the internet just as airline passengers do 3,000+ systems installed Longtime focus: the passenger Bigger aircraft with more seats and passengers This market is becoming established
Slide 118: Now there is a reason for pilots to want the internet as well
Now there is a reason for pilots to want the internet as well Thousands fly but 90% don’t have broadband internet New opportunity: the pilot Haven’t seen the need in the cockpit New applications will stimulate demand *Gogo estimates as of 6/22/2015. *
Slide 119: The plane will generate and consume far more data than passengers
The plane will generate & consume far more data than passengers The Internet of Things is coming The future: the entire plane Revolutionizing what we can do with airplane systems Essential components to deliver connected aircraft
Slide 120: Agenda
Agenda 3Ps of Connectivity Segmenting and Connecting Aircraft Progress and Strategy
Slide 121: Gogo Biz platform offers optimum value and pricing for all aircraft sizes
Gogo Biz platform offers optimum value and pricing for all aircraft sizes The ‘pipe’ – Gogo Biz for any aircraft ATG8000/ ATG5000 LARGE JETS 2,900 aircraft ATG 8000 for higher capacity aircraft ATG5000/ ATG4000 MEDIUM JETS 4,300 aircraft 87% (1) of installs are on medium or large aircraft ATG2000 LI
Slide 122: Gogo Biz aviation has solutions for international aircraft
Gogo Biz aviation has solutions for international aircraft Inmarsat Swift Broadband Gogo offers hardware and service – Aviator 200 – Aviator 300 – Aviator 700 Rest of world broadband Small to Medium Aircraft Large Aircraft Ku band – expensive and limited Ka band – Inmarsat Jet ConneX will offer high
Slide 123: The platform: Universal Communications System (UCS)
The ‘platform’ – Universal Communications System (UCS) UCS Data router for every aviation broadband network Voice router for every aviation voice network Server capable of hosting Gogo and third party applications Interfaces to avionics systems Wi-Fi Bridge 3G/4G Modem Ku band In-Cabin Devices Avion
Slide 124: As selected by NetJets for their fleets
As selected by NetJets for their fleets UCS Gogo Biz Entire domestic fleet Gogo Text and Talk Largest business aviation selection of the service Gogo Vision Largest business aviation selection of wireless IFE Gogo Cloud First fully automatic IFE video update UCS5000 First fractional fleet selection
Slide 125: Video
Video 5
Slide 126: Agenda
Agenda 3Ps of Connectivity Segmenting and Connecting Aircraft Progress and Strategy
Slide 127: Strong BA revenue growth, profitability
43% CAGR 87% CAGR BA Segment Profit BA Revenue ($M) Strong BA revenue growth, profitability ($M) $3 $63 2009 2014 $26 $156 2009 2014
Slide 128: Thousands more aircraft to connect
Market growing nearly 30% over the next decade Available 91 % North America 21,000 ROW 7,000 Available 84 % Gogo 15 % Available 89 % Thousands more aircraft to connect 20,000 market 2,800 market Sources: JetNet iQ Report Q4 2014; General Aviation Manufacturers Association 2012 Statistical Databook;
Slide 129: Key priorities
Increase aircraft online Increase ARPU Connect the pilot and the plane Key priorities
Slide 130: Connecting more airplanes
Connecting more airplanes Improving efficiency of aircraft increases need for broadband Equipment incentives increase demand Flight crew applications expands appeal Segmentation compelling to smaller aircraft
Slide 131: Increasing revenue per aircraft
Increasing revenue per aircraft Data usage Real time weather Aircraft operating parameters Services Gogo Text and Talk Gogo Vision Hardware ATG 8000 UCS 5000 FANS Over Iridium
Slide 132: Connecting the pilot and the plane
Connecting the pilot and the plane GOGOAIR.COM | 133` Developing an airborne platform for third parties to enable aircraft systems to get online
Slide 133: Summary: Market leader and innovator
Market leader and innovator Loyal and growing customer base Industry’s largest online fleet Broadest product portfolio Summary
Slide 134: Financial Flight Plan
Financial Flight Plan Norman Smagley Executive Vice President & Chief Financial Officer
Slide 135: Strong revenue growth
87% CAGR 43% CAGR Strong revenue growth CA-NA Revenue ($M) BA Revenue ($M) $26 $156 2009 2014 $11 $251 2009 2014
Slide 136: Drives segment profitability
10% Margin 40% Margin 22% Margin Drives segment profitability CA-NA Segment Profit ($M) BA Segment Profit ($M) Combined Segment Profit ($M) $(91) $26 $3 $63 $(89) $89 2009 2014 2009 2014 2009 2014
Slide 137: CA-ROW financial profile similar to CA-NA
CA-ROW financial profile similar to CA-NA CA-ROW Awarded Aircraft Current aircraft backlog plus new wins come online ARPA increases Similar economics to CA-NA expected at scale Drives segment results to profitability + 2012 Jun -15
Slide 138: High contribution margin creates visibility to future cash flow
High contribution margin creates visibility to future cash flow Established profitability Total Revenue ($M) Adjusted EBITDA* ($M) *Please see reconciliation of adjusted EBITDA in appendix $(89) $11 2009 2014 $37 $408 2009 2014
Slide 139: Financial Flight Plan
Financial Flight Plan Operating Leverage Growing Revenue Success Based CAPEX Most Efficient Capacity
Slide 140: Growing revenue beyond passenger connectivity
North America Global $37M Aircraft On-Line CA-NA 2,100 BA 2,800 ARPA / ARPU CA-NA $121K BA $24K+ AVERAGE REVENUE PER AIRCRAFT Growing revenue beyond passenger connectivity AIRCRAFT ONLINE 2014 2009 $ 408 M + REVENUE
Slide 141: Financial Flight Plan
Financial Flight Plan Operating Leverage Growing Revenue Success Based CAPEX Most Efficient Capacity
Slide 142: Technology leadership creates the most cost efficient capacity
Small fraction of alternative solutions 50% Ku 50% High Throughput Ku Regional 14 GHz Global 2Ku vs. Cost of Industry Solutions Gogo Technology Technology leadership creates the most cost efficient capacity Gogo’s technology bandwidth cost advantage Note: Cost of solution comparison determined using
Slide 143: Most cost efficient capacity: significant competitive advantage
2Ku Next Gen ATG 2Ku (1) Most cost efficient capacity- significant competitive advantage Single Aisle Mainline Twin Aisle International Ku (current) $0.5M $1.1M Ku (HTS) $0.4M $0.8M Ku (current) $1.8M Ku (HTS) $1.3M (1) Net present value of bandwidth savings based on Gogo estimates using a 9% discou
Slide 144: Financial Flight Plan
Financial Flight Plan Operating Leverage Growing Revenue Success Based CAPEX Most Efficient Capacity
Slide 145: Multiple operating leverage opportunities
General & Administrative Sales & Marketing Engineering, Design & Development Cost of Service Multiple operating leverage opportunities New technologies and higher utilization drives down bandwidth unit costs All drop as percent of revenue
Slide 146: Multiple operating leverage opportunities
General & Administrative Sales & Marketing Engineering, Design & Development Cost of Service Multiple operating leverage opportunities STCs: One time & success based, scalable Solutions & products: leveraged across segments, geographies, and airlines All drop as percent of revenue
Slide 147: Multiple operating leverage opportunities
General & Administrative Sales & Marketing Engineering, Design & Development Cost of Service Multiple operating leverage opportunities International sales team established Marketing leveraged across geographies and airlines All drop as percent of revenue
Slide 148: Multiple operating leverage opportunities
General & Administrative Sales & Marketing Engineering, Design & Development Cost of Service Multiple operating leverage opportunities Established and will be leveraged across regions All drop as percent of revenue
Slide 149: Financial Flight Plan
Financial Flight Plan Operating Leverage Growing Revenue Success Based CAPEX Most Efficient Capacity
Slide 150: Success based capital expenditures
Success based capital expenditures Success based investment Generate positive ROI Low maintenance CapEx Expected high ROI for Next Gen ATG network Industry-leading product innovations Scale with large installed base Airborne Equipment Network Equipment Capitalized Software
Slide 151: Fasten your seatbelts ... the best is yet to come
Revenue Growth Operating Expense Leverage Service Margin Expansion High ROI, High Incremental Margins Win Aircraft & Realize Connected Aircraft Global Scale Technology Leadership Success Based CAPEX Fasten your seatbelts ... the best is yet to come
Slide 152: Q&A
Q&A
Slide 153: Closing Remarks
Closing Remarks Michael Small President & Chief Executive Officer
Slide 154: Competitive Advantages
Competitive Advantages Specialization in aviation and telecom Superior technology and cost advantage Industry’s most experienced end-to-end service provider Unmatched scale Gogo is well-positioned to win Signposts Develop and deploy network and connectivity technology Win aircraft Enable the connect
Slide 155: Appendix
Appendix
Slide 156: Adjusted EBITDA reconciliation ($MM)
2009 2010 2011 2012 2013 2014 Adjusted EBITDA reconciliation ($MM) Net Income (142) (140) (18) (96) (146) (85) Interest Income (0) (0) (0) (0) (0) (0) Interest Expense – Income Tax Provision – Depreciation & Amortization EBITDA (91) (106) (49) (60) Fair Value Derivative Adjustments – (59) (10) – Cla
Slide 157: Cash CapEx reconciliation ($MM)
2009 2010 2011 2012 2013 2014 Cash CapEx reconciliation ($MM) Purchases of Property and Equipment (69) (33) (33) (67) (105) (132) Acquisition of Intangible Assets (Capitalized Software) (8) (7) (10) (12) (16) (17) Gross CapEx (77) (40) (43) (79) (121) (150) Change in Deferred Airborne Lease Incentiv
Slide 158: Analyst and Investor Day 2015
Analyst and Investor Day 2015