Gogo Inc. · NASDAQ:GOGO
Gogo — Investor Presentation (February 2017)
24 slides from Gogo's investor presentation, Feb 27, 2017
Slide 1: February 2017 Investor Presentation
February 2017 Investor Presentation
Slide 2: 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 currently available to manage
Slide 3: Transforming the Aviation Industry
TRANSFORMING THE AVIATION INDUSTRY 1) As of 12/31/2016 2) Based on management estimates, public filings and trade publications of broadband IFC installations as of 12/31/2016 Gogo is the global leader in providing broadband connectivity solutions and wireless entertainment to the aviation industry >
Slide 4: While Delivering Enormous Value
WHILE DELIVERING ENORMOUS VALUE Passenger Experience Passenger Connectivity & Entertainment Aircraft Operational Efficiencies Rebooking Travel Baggage Tracker Digitized Attendants Turbulence Avoidance Lower Fuel Costs Maintenance Savings Turbulence Avoidance Internet Streaming Movies IPTV
Slide 5: Most Planes and Large Opportunity
MOST PLANES AND LARGE OPPORTUNITY Gogo CA - Satellite Gogo BA - ATG Gogo CA – ATG Note: Data based on management estimates, trade publications and other public sources as of 12/31/2016 and include both commercial and business broadband connected aircraft where specified Number of Aircraft Online Com
Slide 6: Profitability Path for All Segments
#1 More Bandwidth GOGOAIR.COM | PROFITABILITY PATH FOR ALL SEGMENTS 19% margin 42% margin Note: Aircraft online and aircraft backlog, which refers to aircraft awarded, but not yet installed, are as of 12/31/2016 Note: Note market share is based on installed aircraft from public sources, trade public
Slide 7: Strong Revenue and Profitability Growth
STRONG REVENUE AND PROFITABILITY GROWTH Note: Minor differences exist due to rounding (1) Please see reconciliation of Adjusted EBITDA in appendix $49 30% CAGR $89 CA-ROW Segment Loss Adjusted EBITDA $113 $24 $155 Revenue ($M) Adjusted EBITDA ($M) (1)
Slide 8: Competitive Strengths
Airline support on four continents 1,000+ annual installations Large and growing STC portfolio Remote deployment of software updates Competitive Strengths GOGOAIR.COM | INNOVATIVE NETWORK TECHNOLOGY CUSTOMIZABLE PLATFORMS GLOBAL AIRCRAFT OPERATIONS Based on net installations of CA and BA aircraft fo
Slide 9: 2Ku Momentum Continues
2Ku MOMENTUM CONTINUES * 2Ku awards include both signed contracts and letters of intent 2015 2016 2014 50 500 1,500+
Slide 10: Leading Technology Platforms for All Aircraft
GOGOAIR.COM | 1 Next Gen ATG expected to be available in 2018 and expected to deliver 100 Mbps 2 Global commercial aircraft estimate from Boeing Market Outlook 2016-2035, excluding regional jets 3 Includes North American business jets and turboprops estimate from JetNet iQ Report Q4 2015 and commerc
Slide 11: 2Ku Brings 100+ Mbps Globally in 2017
2Ku BRINGS 100+ Mbps GLOBALLY IN 2017 GOGOAIR.COM | 2015 Mid 2017 Today Late 2017 2Ku 2Ku 2Ku 2Ku 1 1 Expected results based on management estimates 25 Mbps 50 Mbps 70+ Mbps 100+ Mbps 1 “100 Mbps demonstrated on Gogo’s Jimmy Ray in February 2017”
Slide 12: Next Gen ATG Brings 100+ Mbps to North America in 2018
1 Expected results and availability based on management estimates 1 3 Mbps 10 Mbps 100+ Mbps Uniquely integrates licensed and unlicensed spectrum Leverages existing ground and airborne infrastructure Overnight installation Targeted for smaller aircraft NEXT GEN ATG BRINGS 100+ Mbps TO NORTH AMERICA
Slide 13: Leading Global Operational Capabilities
9/30/16 12/31/16 2017E 2Ku Aircraft Installed 2Ku Installation Lines Days To Install 2Ku Annual 2Ku Install Capacity Global Addressable Fleets Covered by 2Ku STCs Global Maint. Locations 14 12 8 50 35% 33 500+ 40+ < 3 750+ 80% 45 94 24 3 360 35% 33 First 2Ku OEM Installation - - LEADING GLOBAL OPERA
Slide 14: Portfolio of Business Aviation Solutions
* Source: JetNet iQ Report Q4 2015 and Gogo estimates as of June 2016 Large Jets ~3,000 Aircraft * * * * PURCHASE MOTIVATION + Bandwidth Applications + GLOBAL: JX/SBB SBB SBB SBB REGIONAL: ATG/4G/ Next Gen ATG ATG/4G/ Next Gen ATG ATG/4G ATG/4G/ Next Gen ATG Medium Jets ~4,000 Aircraft Light Jets ~5
Slide 15: Growing Shareholder Value
Growing Shareholder Value MORE AIRCRAFT Significant backlog Growing market Leading market share DECLINING INVESTMENT PER AIRCRAFT ARPA GROWTH MARGIN IMPROVEMENT Decreasing installation time Lower airborne equipment costs Higher airborne equipment proceeds Leverage STC portfolio Increase network capa
Slide 16: Strategic Priorities
Scale CA-ROW segment to profitability Further reduce 2Ku installation costs Double ARPA by 2021 Achieve free cash flow in 2019 Scale Globally Expand Technology Leadership Achieve Profitability 1 2 3 STRATEGIC PRIORITIES (1) (1) Free cash flow is defined as cash flow from operating activities less co
Slide 17: Appendix
Appendix
Slide 18: CA-NA: Strong Revenue and Segment Profit Growth
Segment Profit ($M) Revenue ($M) 34% CAGR Note: Minor differences may exist due to rounding. For 2011 and 2013 ARPA is based on aircraft online and for 2015 and 2016 ARPA is based on aircraft online equivalent. Aircraft Online Annualized ARPA ($k) CA-NA: STRONG REVENUE AND SEGMENT PROFIT GROWTH (1)
Slide 19: CA-ROW: Strong Revenue and Segment Profit Growth
Segment Profit ($M) Revenue ($M) Note: Minor differences may exist due to rounding. Aircraft Online Annualized ARPA ($k) CA-ROW: STRONG REVENUE AND SEGMENT PROFIT GROWTH
Slide 20: BA: High Margin Service Revenue Drives Profitability
Segment Profit ($M) Revenue ($M) 22% Total CAGR Satellite ATG BA: HIGH MARGIN SERVICE REVENUE DRIVES PROFITABILITY Units Online Monthly Average Revenue Per Unit (ARPU) 45% Service CAGR 27% CAGR Note: Minor differences may exist due to rounding
Slide 21: Ku Ecosystem Provides Large and Growing Global Capacity
KU ECOSYSTEM PROVIDES LARGE AND GROWING GLOBAL CAPACITY (1) Based on estimates by satellite capacity providers Planned Ku Supply Potential Ku Supply Planned Ku Supply Potential Ku Supply 150 250 370 730 1,000 1,050 North American Ku Bandwidth Supply (Gbps) Global Ku Bandwidth Supply (Gbps) (1) (1)
Slide 22: 2Ku: Proprietary Solution That Stands Apart from the Competition
(1) Based on management estimates and include satellites operated by Inmarsat, Viasat, Eutelsat, and Yahsat as of 12/31/2016. We estimate that there are approximately 10 Ka satellites in the world, but due to lack of interoperability between Ka satellite providers, only 2 to 5 can currently be used
Slide 23: Gogo Installed & Awarded Aircraft as of 12/31/2016
GOGO INSTALLED & AWARDED AIRCRAFT AS OF 12/31/2016 Aircraft Online CA-NA CA-ROW Total ATG Aircraft Online 898 - 898 ATG-4 Aircraft Online 1,719 - 1,719 Ku Aircraft Online - 259 259 2Ku Aircraft Online 59 8 67 Total Aircraft Online 2,676 267 2,943 (1) All figures are as of 12/31/2016. Awarded but not
Slide 24: Adjusted EBITDA Reconciliation ($MM)
ADJUSTED EBITDA RECONCILIATION ($MM) 2011 2012 2013 2014 2015 2016 Net Income (18) (96) (146) (85) (108) (125) Interest Income (0) (0) (0) (0) (0) (2) Interest Expense 1 9 29 33 59 84 Income Tax Provision 1 1 1 1 1 1 Depreciation & Amortization 33 37 56 64 87 106 EBITDA 16 (49) (60) 14 39 64 Fair Va