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
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 Record revenue of $142 million, up 23% Y/Y Record adjusted EBITDA of $14.5 million, up 76% Y/Y 2Ku has officially taken flight 2Ku flying on Aeromexico ©2016 Gogo Inc. and Affiliates. Proprietary & Confidential. 3
Slide 4: Massive 2Ku Momentum
MASSIVE 2Ku MOMENTUM IAG announcement yesterday to connect British Airways, Iberia, and Aer Lingus with 2Ku Partnering with Shareco to install 50 2Ku systems on Hainan and Capital Beijing airlines Extended relationship with Air Canada to install 2Ku on entire wide-body international fleet De
Slide 5: Developments Impacting 2Ku
DEVELOPMENTS IMPACTING 2Ku Secured large capacity commitments with Intelsat and SES Ability to leverage OneWeb’s LEO constellation expected to provide significant advantages in coverage and latency Announced new modem capable of delivering 400 Mbps that gives Gogo plenty of room for growth 2Ku
Slide 6: Aircraft-Centric Approach
AIRCRAFT-CENTRIC APPROACH Great progress on the increasing volume of STC’s; Gogo on track to exceed 75 2Ku installations in 2016 Signed agreements with Airbus & Boeing to install 2Ku on A350 and 787 aircraft Installed or upgraded more than 500 aircraft in CA and BA in Q1, a quarterly record
Slide 7: Business Aviation Progress
BUSINESS AVIATION PROGRESS Gogo Biz 4G is flying on our test lab Customers are provisioning planes for 4G’s commercial launch in 2017 Record quarterly profit of $20 million ©2016 Gogo Inc. and Affiliates. Proprietary & Confidential. 7
Slide 8: Firing on All Cylinders
FIRING ON ALL CYLINDERS 2Ku now in commercial service 2Ku awards have exceeded 1,000 aircraft Continued strong financial and operating results ©2016 Gogo Inc. and Affiliates. Proprietary & Confidential. 8
Slide 9: Q1'16 Record Revenue and CA-NA & BA Segment Profit
Q1’16 RECORD REVENUE AND CA-NA & BA SEGMENT PROFIT Total Revenue ($MM) $126 $138 $142 $116 $121 $22 $23 $19 $20 $20 23% • Q1’16 revenue is up 23% Y/Y Y/Y Growth $95 $101 $107 $116 $119 • Service revenue up 24% Y/Y Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Service Revenue Equipment Revenue Note: Minor diffe
Slide 10: Q1'16 Record Adjusted EBITDA
Q1’16 RECORD ADJUSTED EBITDA Adjusted EBITDA ($MM) $14 76% $11 Y/Y Growth $10 $8 9% 8% $8 10% • Q1’16 Adjusted EBITDA 7% 6% increased 76% to $14.5 million Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Adjusted EBTIDA Adjusted EBITDA Margin Note: Minor differences exist due to rounding ©2016 Gogo Inc. and Affil
Slide 11: CA-NA - Strong Growth in Revenue & Aircraft Online
CA-NA - STRONG GROWTH IN REVENUE & AIRCRAFT ONLINE Service Revenue ($MM) • Service revenue driven largely by $83 $83 increases in aircraft online $75 $78 $72 16% • 2,500 Aircraft Online as of Y/Y Growth 3/31/2016 - 130 aircraft installed in Q1 ’16 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 - ~1,200 ATG-4 ai
Slide 12: CA-NA – ARPA Consistent Segment Margin Expands
CA-NA – ARPA CONSISTENT SEGMENT MARGIN EXPANDS Annualized ARPA • ARPA consistent at $134K: - 15% y/y growth in ARPA excluding $134 $135 $135 $139 $134 aircraft added since the beginning of 2015, primarily regional jets and aircraft with new airline partners, and a Gogo Vision launch promotion in Q1
Slide 13: BA Revenue Continues High Growth
BA REVENUE CONTINUES HIGH GROWTH Service Revenue ($MM) 59% 61% 55% 58% 52% $30.7 $26.0 $28.5 41% • Service revenue increased Y/Y Growth $21.8 $23.8 41% Y/Y to $31 million • Total BA revenue eclipsed $50 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Service Revenue Service Revenue as a % of Total BA Revenue mil
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 (End of Period) 3,681 • ATG units online increased 23%, 3,314 3,477 23% to nearly 3,700 3,170 2,983 Y/Y Growth • ATG Service ARPU increased 15%, to almost $2,500 per month Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 • Segm
Slide 15: Strong Progress Internationally
STRONG PROGRESS INTERNATIONALLY Aircraft Online (End of Period) 237 • 237 aircraft online, up 35 Q/Q 202 160 104% 116 148 Y/Y Growth • Revenue of $4.6 million for Q1’16, up three-fold from Q1’15 • Awarded but not yet installed aircraft Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 is up to 600+, mostly 2Ku CA-
Slide 16: Consolidated Cash CapEx
CONSOLIDATED CASH CAPEX Cash CapEx ($MM) • Q1 ’16 Y/Y changes in capital expenditures: Y/Y Decrease $32 $8MM $23 $24 Lower airborne equipment purchases $12 $13 Lower spend on headquarter buildout Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Note: Minor differences exist due to rounding. ©2016 Gogo Inc. and Af
Slide 17: Balance Sheet
BALANCE SHEET $313 million of cash on balance sheet As expected, Q1 had higher payments and an additional principal payment under our credit facility Q1 cash used is consistent with full year expectations ©2016 Gogo Inc. and Affiliates. Proprietary & Confidential. 17
Slide 18: In Summary
IN SUMMARY Strong financial performance Momentum is building for 2Ku Strong tailwind for continued growth in revenue and profitability ©2016 Gogo Inc. and Affiliates. Proprietary & Confidential. 18
Slide 19: Q&A
Q&A
Slide 20: Appendix
Appendix
Slide 21: Adjusted EBITDA Reconciliation ($MM)
ADJUSTED EBITDA RECONCILIATION ($MM) 2015 2015 2015 2015 2016 2009 2010 2011 2012 2013 2014 Q1 Q2 Q3 Q4 Q1 Net Income (142) (140) (18) (96) (146) (85) (20) (25) (29) (34) (24) Interest Income (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) Interest Expense 30 – 1 9 29 33 10 16 17 16 16 Income Tax Provis
Slide 22: Cash CapEx Reconciliation ($MM)
CASH CAPEX RECONCILIATION ($MM) 2015 2015 2015 2015 2016 2009 2010 2011 2012 2013 2014 Q1 Q2 Q3 Q4 Q1 Purchases of Property (69) (33) (33) (67) (105) (132) (53) (33) (19) (30) (31) and Equipment Acquisition of Intangible Assets (8) (7) (10) (12) (16) (17) (4) (4) (4) (5) (6) (Capitalized Software) C