Gogo Inc. · NASDAQ:GOGO
Gogo — Q2 2017 Earnings Presentation
20 slides from Gogo's earnings presentation, Aug 7, 2017
Slide 1: 2nd Quarter 2017 Earnings Results
2nd Quarter 2017 Earnings Results Michael Small – Chief Executive Officer John Wade – Chief Operating Officer Barry Rowan – Chief Financial Officer August 7, 2017 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: On track to deliver value
On track to deliver value 17% y/y Growth Total Revenue ($MM) 2Ku now installed on 248 aircraft Launched 2Ku service on 5 airlines in Q2 Reaffirm 2019 free cash flow guidance Service revenue up 21% y/y $148 $173
Slide 4: Momentum building across the business
Momentum building across the business CA-NA take rate up +20% y/y to 7.7% CA-ROW revenue up 145% y/y $226,000 ARPA, up 56% y/y BA service revenue up 30% y/y Segment profit margin of 44%
Slide 5: 2Ku delivering industry leading performance
2Ku delivering industry leading performance On all satellite connected aircraft increased throughput unlocks bandwidth of HTS satellites New satellite modem 15 Mbps + per passenger 98 % + coverage of global flight hours 98 % + service availability
Slide 6: Accelerating 2Ku installations
Accelerating 2Ku installations 2017 2Ku install guidance reaffirmed 550 450 to Day 2Ku installs achieved <2 2017 planned installs covered by STCs 80% A350 First 2Ku OEM installation completed
Slide 7: BA continuing strong performance
BA continuing strong performance Gogo Biz 4G began shipping in Q2 Next gen ATG on track for delivery in 2018 Increased adoption for smaller and older aircraft First 2Ku equipped private aircraft now operational
Slide 8: Strong revenue growth
31% y/y Decrease Strong revenue growth 17% y/y Growth Q2 ’17 revenue up 17% y/y Service revenue up 21% y/y Q2 ’17 Adjusted EBITDA of $10 million included $14 million in costs related to: 2Ku service launch OEM programs Development of next generation ATG solution Note: Minor differences exist due to
Slide 9: CA-NA: Continued service revenue growth
CA-NA: Continued service revenue growth 10% y/y Growth Service revenue up 10% driven by: 2,791 aircraft online, up 195 aircraft y/y $141,000 annualized ARPA, up 3% y/y 7.7% take rate, up +20% y/y Note: Minor differences exist due to rounding 13% y/y Decrease Segment profit of $16 million Impacted by
Slide 10: CA-ROW: Revenue doubled for second consecutive quarter
CA-ROW: Revenue doubled for second consecutive quarter 145% y/y Growth Note: Minor differences exist due to rounding Revenue of $14.1 million, up 145% from Q2 ’16 Annualized ARPA up 56% to a new record of $226,000 56% y/y Growth
Slide 11: CA-ROW: Launched four new airlines
CA-ROW: Launched four new airlines Note: Minor differences exist due to rounding Aircraft online up 69 y/y, to 318 Launched four new airlines 2Ku awarded but not yet installed aircraft approximately 620 at 6/30/2017 Segment loss increased to $31 million Including the cost of launching four new airli
Slide 12: BA: Continuing strong revenue growth
BA: Continuing strong revenue growth Total revenue increased 18% y/y, to $58 million Service revenue increased 30% y/y to $42 million ATG aircraft online increased 17% y/y, to over 4,400 ATG Service ARPU increased 14% y/y, to nearly $2,900 per month Note: Minor differences exist due to rounding 17%
Slide 13: BA: Outstanding profitability profile
BA: Outstanding profitability profile Segment profit increased 33% y/y, to $25 million Segment profit margin of 44% Up 5 percentage points from prior year Note: Minor differences exist due to rounding 33% y/y Growth
Slide 14: Increased Cash CapEx for 2Ku installations
Increased Cash CapEx for 2Ku installations Note: Minor differences exist due to rounding. Note: Cash CAPEX is a non-GAAP measure. See Appendix for a reconciliation to the most comparable GAAP measure. $26MM y/y Increase Cash CapEx spend primarily to bring new aircraft online 70% of 2017 Cash CapEx f
Slide 15: Outlook
Outlook On track to achieve 450-550 2Ku installs in 2017, including approximately 150 in CA-ROW Expect 2017 revenue to be at the high end of $670-$695 million guidance range Adjusted EBITDA expected to approximately double in the second half of 2017 and to be at the low end of $60-$75 million guidan
Slide 16: Q&A
Q&A
Slide 17: Appendix
Appendix
Slide 18: Gogo installed and awarded aircraft as of 6/30/2017
Gogo installed and awarded aircraft as of 6/30/2017 Note: On May 27, 2016, we entered into a letter agreement with American Airlines whereby American exercised its option to terminate its agreement with Gogo on approximately 550 Gogo-installed mainline aircraft and we currently expect such aircraft
Slide 19: Adjusted EBITDA reconciliation ($mm)
Adjusted EBITDA reconciliation ($mm) 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 Net Income (24) (40) (33) (27) (41) (44) Interest Income (0) (0) (1) (1) (1) (1) Interest Expense 16 18 25 25 27 27 Depreciation & Amortization 24 25 27 30 30 31 EBITDA 17 2 18 27 16 13 Stock-based Compensation Expe
Slide 20: Cash CapEx reconciliation ($mm)
Cash CapEx reconciliation ($mm) 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 Purchases of Property and Equipment (31) (40) (36) (41) (64) (65) Acquisition of Intangible Assets (Capitalized Software) (6) (8) (8) (7) (8) (9) Consolidated Capital Expenditures (37) (48) (44) (48) (72) (74) Change in