Gogo Inc. · NASDAQ:GOGO
Gogo — Investor Presentation (February 2016)
34 slides from Gogo's investor presentation, Feb 29, 2016
Slide 1: Investor Presentation
February 29, 2016 Investor Presentation Exhibit 99.1
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: Gogo's Mission
GOGOAIR.COM | Our mission is to advance aviation by connecting every aircraft TECHNOLOGY LEADERSHIP OPERATIONAL EXCELLENCE PRODUCTS & SERVICES OPEN ARCHITECTURE GOGO’S MISSION
Slide 4: Why Invest in Gogo
6X more connected aircraft than closest competitor $30B market High revenue growth High operating leverage Global scale Specialize in Connected Aircraft Leading technology WHY INVEST IN GOGO Leading Position, Experience & Scale Large Growth Opportunity Attractive Model High Barriers to Entry GOGOAIR
Slide 5: Agenda
AGENDA GOGOAIR.COM | On the Move Strategy Going Forward Key Differentiators Gogo Commercial Aviation Business Aviation
Slide 6: Delivering Next Generation Connectivity
ATG / ATG4 launched IFC in North America 2Ku - the catalyst for changing global aviation in 2016 & beyond Fast & Affordable Near Global Reliable Open DELIVERING NEXT GENERATION CONNECTIVITY ATG ATG4 2008 2012 2015 2018e 1st Generation 2nd Generation 3rd Generation 2Ku GOGOAIR.COM |
Slide 7: Growth and Profitability Trends Are Strong
GROWTH AND PROFITABILITY TRENDS ARE STRONG Note: Minor differences exist due to rounding (1) Please see reconciliation of Adjusted EBITDA in appendix Adjusted EBITDA(1) ($MM) $49 CA-ROW Segment Loss Revenue ($MM) 33% CAGR $89 Adjusted EBITDA $113 $24 GOGOAIR.COM |
Slide 8: Gogo Has the Most Broadband Aircraft Online
GOGO HAS THE MOST BROADBAND AIRCRAFT ONLINE Global Eagle Panasonic Others Total Gogo Broadband Aircraft Online Gogo BA ATG Aircraft Online Gogo CA Aircraft Online GOGOAIR.COM | * Data based on management estimates, trade publications and other public sources as of 12/31/2015 and include both commerc
Slide 9: Global Leader with Premier Partners
GLOBAL LEADER WITH PREMIER PARTNERS Business Segment Market Position Worldwide % of 2015 Revenue Customers Include Commercial Aviation – North America #1 2,387 installed aircraft 62% 36% 2% Business Aviation #1 3,477 installed ATG aircraft #2 202 installed aircraft Commercial Aviation – Rest of Worl
Slide 10: Agenda
AGENDA On the Move Strategy Going Forward Key Differentiators Gogo Commercial Aviation Business Aviation GOGOAIR.COM |
Slide 11: Differentiator #1: Operational Excellence by Mastering Aviation & Telecom
DIFFERENTIATOR #1 OPERATIONAL EXCELLENCE BY MASTERING AVIATION & TELECOM Aviation Regulatory Environment End-to-End Telecom Service Provider Aviation Global Logistics Aviation Engineering Requirements Only Gogo masters all four requirements GOGOAIR.COM |
Slide 12: Differentiator #2: 2Ku Technology Leadership
DIFFERENTIATOR #2 2Ku: TECHNOLOGY LEADERSHIP Coverage: Near global coverage Aero performance: Low profile, low fuel burn Cost: Most cost efficient globally Capacity: ~180 Ku satellites; HTS and LEO satellites coming Reliability: Fewer moving parts, satellite redundancy GOGOAIR.COM | Speed: 70 Mbps n
Slide 13: Differentiator #3: Products and Services Platforms
DIFFERENTIATOR #3 PRODUCTS AND SERVICES PLATFORMS Improved operations Better decision making with electronic flight bag, real-time weather/flight routing, aircraft health monitoring, predictive maintenance, etc. Digitized front line employees More efficient crew and improved passenger experience thr
Slide 14: Agenda
AGENDA On the Move Strategy Going Forward Key Differentiators Gogo Commercial Aviation Business Aviation GOGOAIR.COM |
Slide 15: Capitalizing on Large Growth Opportunity in Aircraft and Data Demand
CAPITALIZING ON LARGE GROWTH OPPORTUNITY IN AIRCRAFT AND DATA DEMAND Commercial Aircraft ~5x 1) Global broadband aircraft online as of 12/31/2015 based on management estimates, public filings and trade publications.2) Derived from Boeing Current Market Outlook 2015 – 2034, excludes: cargo aircraft 3
Slide 16: Focused Growth Strategy
FOCUSED GROWTH STRATEGY ~11,000 uncommitted commercial aircraft globally & growing ~ 16,000 uncommitted business aircraft in North America & growing Develop open communications platforms to enable: Tailored passenger experience Digitized front line employees Improved operations Aggressive roll out o
Slide 17: Agenda
AGENDA GOGOAIR.COM | On the Move Strategy Going Forward Key Differentiators Gogo Commercial Aviation Business Aviation
Slide 18: Leading Global Position and Scale in Commercial Aviation
GOGO - LEADING GLOBAL POSITION AND SCALE IN COMMERCIAL AVIATION Most Connectivity Revenue ($MM) CA-ROW CA-NA Most Broadband Connected Commercial Aircraft 2,589 2.6X Closest Competitor CA-NA & CA-ROW Service Revenue 40% CAGR 2Ku’s capacity and global coverage will drive Gogo’s revenue growth GOGOAIR.
Slide 19: On a Mission to Connect Global Aviation
ON A MISSION TO CONNECT GLOBAL AVIATION GOGOAIR.COM | Gogo is recognized as a leader globally Gogo presence Latin America 1,400 Europe, CIS 5,200 Middle East, Africa 1,700 Asia Pacific 5,300 61%* YOY increase in consideration 63%* of airlines consider Gogo for IFC/IFE needs *Source: Gogo Global Airl
Slide 20: 2Ku: Superior Design, Superior Performance
2Ku: SUPERIOR DESIGN, SUPERIOR PERFORMANCE Traditional Gimbaled Aperture 2Ku Photo to scale 2Ku is exclusive to Gogo Performance results: Speed tests exceeded 70 Mbps to a plane Streamed videos simultaneously to 40 devices, plus IPTV Next generation modem expected to reach 400 Mbps Market deployment
Slide 21: 2Ku: Fast, Flat, Global, Reliable, Open
2Ku: FAST, FLAT, GLOBAL, RELIABLE, OPEN GOGOAIR.COM | (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 s
Slide 22: CA-North America: Scale Drives Profitability
CA-NORTH AMERICA: SCALE DRIVES PROFITABILITY GOGOAIR.COM | CA-NA Service Revenue ($MM) & Aircraft Online CA-NA Segment Profit ($MM) Strong revenue growth fueled by increase in aircraft online and ARPA growth Strong operating leverage Expanding segment profit margins 280 aircraft awarded, but not yet
Slide 23: CA-Rest of World: Focus on International Expansion
202 aircraft online as of 12/31/2015 Near global Ku-band satellite network >450 international aircraft awarded, but not yet installed as of 2/21/16, mostly 2Ku awards >800 2Ku aircraft awarded but not yet installed as of 2/21/16 by 7 airlines International Aircraft Awards and Aircraft Online Executi
Slide 24: Open Platform to Suit Airlines' Needs
Letting the airlines be themselves. Business models to suit airlines’ needs. OPEN PLATFORM TO SUIT AIRLINES’ NEEDS GOGOAIR.COM | Connectivity, Text & Talk GGV, IPTV Crew connect, Electronic Flight Bag
Slide 25: Key Priorities for Commercial Aviation
KEY PRIORITIES FOR COMMERCIAL AVIATION GOGOAIR.COM | Win more aircraft Install awarded aircraft Develop open communications platforms Launch 2Ku commercially Continue ATG-4 upgrades Open platform for Next Gen solutions 1. Increase Aircraft Online 3. Enable Connected Aircraft 2. Bring More Bandwidth
Slide 26: Agenda
AGENDA GOGOAIR.COM | On the Move Strategy Going Forward Key Differentiators Gogo Commercial Aviation Business Aviation
Slide 27: Established & Profitable Leader in Business Aviation
ESTABLISHED & PROFITABLE LEADER IN BUSINESS AVIATION GOGOAIR.COM | Total Revenue ($MM) Segment Profit ($MM) Market leader: Total of 8,900+ units online 90% market share in broadband connected aircraft 63% market share in Iridium connected aircraft Long-lasting relationships with all leading OEM and
Slide 28: Innovator with Leading R&D Capabilities
The only provider of all three primary networks to business aviation: ATG broadband, Iridium and Swiftbroadband INNOVATOR WITH LEADING R&D CAPABILITIES GOGOAIR.COM | In-flight Connectivity Connected Communications Platforms In-flight Entertainment Gogo Biz: ATG 1000, 2000, 4000, 5000 & 8000 4G expec
Slide 29: Gogo Biz for Any Aircraft
GOGO BIZ FOR ANY AIRCRAFT GOGOAIR.COM | 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 LIGHT JETS 5,500 aircraft* 62%(1) of units are being installed on light je
Slide 30: BA: High-Margin Service Revenue Drives Profitability and Cash Flow
BA: HIGH-MARGIN SERVICE REVENUE DRIVES PROFITABILITY AND CASH FLOW GOGOAIR.COM | Service Revenue ($MM) ATG Aircraft Online Segment Profit ($MM) Average Monthly Service Revenue per Unit ($) 49% CAGR
Slide 31: Key Priorities for Business Aviation
KEY PRIORITIES FOR BUSINESS AVIATION GOGOAIR.COM | Increase North American market penetration, smaller aircraft Expand global service offerings Universal cabin system Cockpit applications Gogo Cloud – content delivery network 4G is expected in 2017 Develop Next Gen solutions 1. Increase Aircraft Onl
Slide 32: In Summary: Positioned for Strong Growth
IN SUMMARY POSITIONED FOR STRONG GROWTH GOGOAIR.COM | 2Ku – is the catalyst for connecting global aviation Combined CA-NA and BA free cash flow positive for full year 2015 Aircraft Online ARPA Profitability Growth Game Changer Cash Flow Positive
Slide 33: Appendix
APPENDIX GOGOAIR.COM |
Slide 34: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION ($MM) 2009 2010 2011 2012 2013 2014 2015 Net Income (142) (140) (18) (96) (146) (85) (108) Interest Income (0) (0) (0) (0) (0) (0) (0) Interest Expense 30 – 1 9 29 33 59 Income Tax Provision – 3 1 1 1 1 1 Depreciation & Amortization 22 31 33 37 56 65 87 EBITDA (91) (10