Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 28, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Entity Interactive Data Current | Yes | |
Entity Central Index Key | 0001537054 | |
Document Fiscal Period Focus | Q1 | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Year Focus | 2023 | |
Entity Registrant Name | Gogo Inc. | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 128,586,011 | |
Entity Address, Country | CO | |
Document Transition Report | false | |
Document Quarterly Report | true | |
Entity File Number | 001-35975 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-1650905 | |
Entity Address, Address Line One | 105 Edgeview Dr | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Broomfield | |
Entity Address, Postal Zip Code | 80021 | |
City Area Code | 303 | |
Local Phone Number | 301-3271 | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Trading Symbol | GOGO | |
Security Exchange Name | NASDAQ | |
Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Preferred Stock Purchase Rights | |
Trading Symbol | GOGO | |
Security Exchange Name | NASDAQ |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 163,266 | $ 150,550 |
Short-term investments | 24,728 | 24,796 |
Cash, Cash Equivalents, and Short-Term Investments, Total | 187,994 | 175,346 |
Accounts receivable, net of allowances of $1,532 and $1,778, respectively | 46,698 | 54,210 |
Inventories | 54,496 | 49,493 |
Prepaid expenses and other current assets | 46,259 | 45,100 |
Total current assets | 335,447 | 324,149 |
Non-current assets: | ||
Property and equipment, net | 104,685 | 104,595 |
Intangible assets, net | 50,444 | 49,509 |
Operating lease right-of-use assets | 73,468 | 75,261 |
Other non-current assets, net of allowances of $487 and $501, respectively | 34,478 | 43,355 |
Deferred income taxes | 160,716 | 162,657 |
Total non-current assets | 423,791 | 435,377 |
Total assets | 759,238 | 759,526 |
Current liabilities: | ||
Accounts payable | 14,487 | 13,646 |
Accrued liabilities | 49,300 | 60,056 |
Deferred revenue | 2,357 | 3,418 |
Current portion of long-term debt | 7,250 | 7,250 |
Total current liabilities | 73,394 | 84,370 |
Non-current liabilities: | ||
Long-term debt | 688,991 | 690,173 |
Non-current operating lease liabilities | 77,265 | 79,241 |
Other non-current liabilities | 7,731 | 7,611 |
Total non-current liabilities | 773,987 | 777,025 |
Total liabilities | 847,381 | 861,395 |
Commitments and contingencies (Note 11) | ||
Stockholders’ deficit | ||
Common stock, par value $0.0001 per share; 500,000,000 shares authorized at March 31, 2023 and December 31, 2022; 137,276,484 and 136,531,362 shares issued at March 31, 2023 and December 31, 2022, respectively; and 128,585,935 and 127,840,813 shares outstanding at March 31, 2023 and December 31, 2022, respectively | 14 | 14 |
Additional paid-in capital | 1,386,295 | 1,385,933 |
Accumulated other comprehensive income | 23,043 | 30,128 |
Treasury stock, at cost | (158,375) | (158,375) |
Accumulated deficit | (1,339,120) | (1,359,569) |
Total stockholders’ deficit | (88,143) | (101,869) |
Total liabilities and stockholders’ deficit | $ 759,238 | $ 759,526 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowances on accounts receivable | $ 1,532 | $ 1,778 |
Other non-current assets, net of allowances | $ 487 | $ 501 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 137,276,484 | 136,531,362 |
Common stock, shares outstanding | 128,585,935 | 127,840,813 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue: | ||
Total revenue | $ 98,597 | $ 92,750 |
Operating expenses: | ||
Cost of service revenue (exclusive of amounts shown below) | 16,797 | 14,634 |
Cost of equipment revenue (exclusive of amounts shown below) | 18,126 | 14,281 |
Engineering, design and development | 7,879 | 5,406 |
Sales and marketing | 6,877 | 6,231 |
General and administrative | 14,199 | 13,458 |
Depreciation and amortization | 2,791 | 3,791 |
Total operating expenses | 66,669 | 57,801 |
Operating income | 31,928 | 34,949 |
Other expense (income): | ||
Interest income | (1,916) | (47) |
Interest expense | 8,976 | 10,889 |
Other expense (income), net | 31 | (26) |
Total other expense | 7,091 | 10,816 |
Income before income taxes | 24,837 | 24,133 |
Income tax provision | 4,388 | 1,937 |
Net income | $ 20,449 | $ 22,196 |
Net income attributable to common stock per share | ||
Basic | $ 0.16 | $ 0.20 |
Diluted | $ 0.15 | $ 0.18 |
Weighted average number of shares: | ||
Basic | 129,136 | 111,414 |
Diluted | 133,602 | 134,095 |
Service [Member] | ||
Revenue: | ||
Total revenue | $ 78,499 | $ 70,667 |
Product [Member] | ||
Revenue: | ||
Total revenue | $ 20,098 | $ 22,083 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 20,449 | $ 22,196 |
Other comprehensive income (loss), net of tax | ||
Currency translation adjustments, net of tax | 75 | 111 |
Cash flow hedges: | ||
Amount recognized in other comprehensive income (loss) | (2,439) | 16,053 |
Less: income (loss) realized and reclassified to earnings | 4,721 | (8) |
Changes in fair value of cash flow hedges | (7,160) | 16,061 |
Other comprehensive income (loss), net of tax | (7,085) | 16,172 |
Comprehensive income | $ 13,364 | $ 38,368 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating activities: | ||
Net income | $ 20,449 | $ 22,196 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 2,791 | 3,791 |
Loss on asset disposals, abandonments and write-downs | 107 | 14 |
Provision for expected credit losses | 93 | 259 |
Deferred income taxes | 4,273 | 1,887 |
Stock-based compensation expense | 5,041 | 4,007 |
Amortization of deferred financing costs and interest rate caps | 764 | 947 |
Accretion of debt discount | 108 | 115 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 7,405 | (4,571) |
Inventories | (5,003) | (2,491) |
Prepaid expenses and other current assets | (8,632) | 392 |
Contract assets | 557 | (2,407) |
Accounts payable | 1,191 | (857) |
Accrued liabilities | (9,620) | (5,926) |
Deferred revenue | (1,054) | (226) |
Accrued interest | 130 | 1,349 |
Other non-current assets and liabilities | (86) | (613) |
Net cash provided by operating activities | 18,514 | 17,866 |
Investing activities: | ||
Purchases of property and equipment | (3,112) | (7,598) |
Acquisition of intangible assets—capitalized software | (1,484) | (1,457) |
Proceeds from interest rate caps | 6,087 | 0 |
Redemptions of short-term investments | 24,796 | 0 |
Purchases of short-term investments | (24,728) | 0 |
Net cash provided by (used in) investing activities | 1,559 | (9,055) |
Financing activities: | ||
Payments on term loan | (1,813) | (1,813) |
Payments on finance leases | (57) | (43) |
Stock-based compensation activity | (5,575) | (23) |
Net cash used in financing activities | (7,445) | (1,879) |
Effect of exchange rate changes on cash | 88 | (16) |
Increase (decrease) in cash, cash equivalents and restricted cash | 12,716 | 6,916 |
Cash, cash equivalents and restricted cash at beginning of period | 150,880 | 146,268 |
Cash, cash equivalents and restricted cash at end of period | 163,596 | 153,184 |
Less: current restricted cash | 0 | 25 |
Less: non-current restricted cash | 330 | 330 |
Cash and cash equivalents at end of period | 163,266 | 152,829 |
Supplemental Cash Flow Information: | ||
Cash paid for interest | 15,014 | 8,577 |
Cash paid for taxes | 12 | 0 |
Non-cash investing activities: | ||
Purchases of property and equipment in current liabilities | $ 9,973 | $ 7,993 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] |
Beginning Balance at Dec. 31, 2021 | $ (320,154) | $ 11 | $ 1,258,477 | $ 1,789 | $ (1,451,628) | $ (128,803) |
Beginning Balance, Shares at Dec. 31, 2021 | 110,791,954 | 6,615,449 | ||||
Net income | 22,196 | 22,196 | ||||
Currency translation adjustments, net of tax | 111 | 111 | ||||
Fair value adjustments of cash flow hedges, net of tax | 16,061 | 16,061 | ||||
Stock-based compensation expense | 4,007 | 4,007 | ||||
Issuance of common stock upon exercise of stock options | 1,106 | 1,106 | ||||
Issuance of common stock upon exercise of stock options, shares | 423,583 | |||||
Issuance of common stock upon vesting of restricted stock units and restricted stock awards, Shares | 555,234 | |||||
Tax withholding related to vesting of restricted stock units | (4,516) | (4,516) | ||||
Issuance of common stock in connection with employee stock purchase plan | 149 | 149 | ||||
Issuance of common stock in connection with employee stock purchase plan, Shares | 13,446 | |||||
Ending Balance at Mar. 31, 2022 | (281,040) | $ 11 | 1,259,223 | 17,961 | (1,429,432) | $ (128,803) |
Ending Balance, Shares at Mar. 31, 2022 | 111,784,217 | 6,615,449 | ||||
Beginning Balance at Dec. 31, 2022 | (101,869) | $ 14 | 1,385,933 | 30,128 | (1,359,569) | $ (158,375) |
Beginning Balance, Shares at Dec. 31, 2022 | 127,840,813 | 8,690,549 | ||||
Net income | 20,449 | 20,449 | ||||
Currency translation adjustments, net of tax | 75 | 75 | ||||
Fair value adjustments of cash flow hedges, net of tax | (7,160) | (7,160) | ||||
Stock-based compensation expense | 5,041 | 5,041 | ||||
Issuance of common stock upon exercise of stock options | $ 179 | 179 | ||||
Issuance of common stock upon exercise of stock options, shares | 68,520 | 68,520 | ||||
Issuance of common stock upon vesting of restricted stock units and restricted stock awards, Shares | 664,020 | |||||
Tax withholding related to vesting of restricted stock units | $ (5,037) | (5,037) | ||||
Issuance of common stock in connection with employee stock purchase plan | 179 | 179 | ||||
Issuance of common stock in connection with employee stock purchase plan, Shares | 12,582 | |||||
Ending Balance at Mar. 31, 2023 | $ (88,143) | $ 14 | $ 1,386,295 | $ 23,043 | $ (1,339,120) | $ (158,375) |
Ending Balance, Shares at Mar. 31, 2023 | 128,585,935 | 8,690,549 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The Business - Gogo Inc. (“Gogo,” the “Company,” “we,” “us,” or “our”) is the world’s largest provider of broadband connectivity services for the business aviation market. We have served this market for more than 25 years. Our mission is to enrich the lives of passengers and the efficiency of operators with the world’s best business aviation in-flight connectivity and customer support. We have always sought to provide the best connectivity for the business aviation market regardless of technology, and we have a successful history of doing so. Until recently, we focused primarily on business aviation aircraft in North America, which comprise approximately 63% of the worldwide business aviation fleet, and we are the leading provider of in-flight connectivity in that market. Gogo started in analogue air-to-ground (“ATG”) technology in the late 1990s, then, as analogue cellular backhaul disappeared, migrated to narrowband satellite connectivity in the early 2000s, then back to ATG with our digital broadband 3G and 4G networks beginning in 2010. We expect to commercially launch our fourth ATG network – Gogo 5G – in the fourth quarter of 2023. We also continue to provide narrowband satellite services to customers in North America and internationally through distribution agreements with satellite providers. In May 2022, in order to further serve our existing customers and expand our target market, we announced plans to expand our broadband offerings beyond ATG by launching the first global broadband service designed for business aviation (“Global Broadband”). The service will use an electronically steered antenna, specifically designed to address a broad range of business aviation aircraft, operating on a low earth orbit (“LEO”) satellite network and is targeted for commercial launch in the second half of 2024. Basis of Presentation - The accompanying Unaudited Condensed Consolidated Financial Statements and notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in conformity with Article 10 of Regulation S-X promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements and should be read in conjunction with our annual audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2023 (the “2022 10-K”). These Unaudited Condensed Consolidated Financial Statements reflect, in the opinion of management, all material adjustments (which include normal recurring adjustments) necessary to fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented. The results of operations and cash flows for the three-month period ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023. We had one class of common stock outstanding as of March 31, 2023 and December 31, 2022 . Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates the significant estimates and bases such estimates on historical experience and various other assumptions believed to be reasonable under the circumstances. However, actual results could differ materially from those estimates. Shareholder Rights Plan – On September 23, 2020, our Board of Directors adopted a Section 382 Rights Agreement (the “Rights Agreement”), between the Company and Computershare Trust Company, N.A., as rights agent. The Rights Agreement is intended to reduce the likelihood of an ownership change under Section 382 of the Internal Revenue Code of 1986, as amended, by deterring any person or group from acquiring beneficial ownership of 4.9 % or more of the shares of the Company’s common stock then-outstanding. On April 27, 2023, the Board of Directors granted a request by the Vanguard Group Inc. (“Vanguard”) that it be deemed an “Exempt Person” under the Rights Agreement, subject to Vanguard satisfying certain ownership conditions, including that neither Vanguard Group Inc. nor any subsidiary or individual fund will have an economic interest of 4.9 % or more of the Company’s common stock. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 2. Revenue Recognition Remaining performance obligations As of March 31, 2023, the aggregate amount of the transaction price in our contracts allocated to the remaining unsatisfied performance obligations (“RPO”) was approximately $ 91 million and excludes consideration from contracts that have an original duration of one year or less. Approximately $ 74 million of the RPO primarily represents connectivity and entertainment service revenues which are recognized as services are provided, which is expected to occur through the remaining term of the contracts. The remaining $ 17 million of the RPO represents future equipment revenue that is expected to be recognized primarily within the next two years . Disaggregation of revenue The following table presents our revenue disaggregated by category (in thousands) : For the Three Months 2023 2022 Service revenue Connectivity $ 77,246 $ 69,495 Entertainment and other 1,253 1,172 Total service revenue $ 78,499 $ 70,667 Equipment revenue ATG $ 15,556 $ 17,948 Narrowband satellite 2,651 3,206 Other 1,891 929 Total equipment revenue $ 20,098 $ 22,083 Customer type Aircraft owner/operator/service provider $ 78,499 $ 70,667 OEM and aftermarket dealer 20,098 22,083 Total revenue $ 98,597 $ 92,750 Contract balances Our current and non-current contract asset balances totaled $ 19.3 million and $ 19.9 million as of March 31, 2023 and December 31, 2022, respectively. Contract assets represent the aggregate amount of revenue recognized in excess of billings primarily for certain sales programs. Our current and non-current deferred revenue balances totaled $ 2.4 million and $ 3.4 million as of March 31, 2023 and December 31, 2022, respectively. Deferred revenue includes, among other things, prepayments for equipment and subscription connectivity products. Major Customers No customer accounted for more than 10 % of revenue during the three-month periods ended March 31, 2023 and 2022 and no customer accounted for more than 10 % of accounts receivable as of March 31, 2023 or December 31, 2022 . |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 3. Earnings Per Share Basic and diluted earnings per share have been calculated using the weighted average number of common shares outstanding for the period. The shares of common stock effectively repurchased in connection with the Forward Transactions (as defined and described in Note 6, “Long-Term Debt and Other Liabilities”) were considered participating securities requiring the two-class method to calculate basic and diluted earnings per share. Net earnings were allocated between common shares and participating securities on a one-to-one basis. The calculation of weighted average shares outstanding as of March 31, 2022 excluded approximately 0.6 million shares associated with the Forward Transactions. As of March 31, 2023 , there were no outstanding shares associated with the Forward Transactions. Refer to Note 6, “Long-Term Debt and Other Liabilities,” for further information. The diluted earnings per share calculations exclude the effect of stock options, deferred stock units, restricted stock units and convertible notes when the computation is anti-dilutive. For the three-month periods ended March 31, 2023 and 2022 , the weighted average number of shares excluded from the computation was 0.6 million and 0.2 million, respectively. The following table sets forth the computation of basic and diluted earnings per share for the three-month periods ended March 31, 2023 and 2022; however, for the reasons and periods described above, the shares of common stock associated with the Forward Transactions were excluded from the computation of basic earnings per share ( in thousands, except per share amounts ): For the Three Months Ended March 31, 2023 2022 Income (Numerator) Shares (Denominator) Per Share Amount Income (Numerator) Shares (Denominator) Per Share Amount Net income $ 20,449 $ 22,196 Less: participation rights on Forward Transactions — 113 Basic earnings per share Undistributed income $ 20,449 129,136 $ 0.16 $ 22,083 111,414 $ 0.20 Effect of dilutive securities Stock-based compensation — 4,466 — 5,550 2022 Convertible Notes — — 1,819 17,131 Diluted earnings per share Undistributed income and assumed conversions $ 20,449 133,602 $ 0.15 $ 23,902 134,095 $ 0.18 Earnings per share - basic $ 0.16 $ 0.20 Earnings per share - diluted $ 0.15 $ 0.18 |
Composition of Certain Balance
Composition of Certain Balance Sheet Accounts | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Composition of Certain Balance Sheet Accounts | 4. Composition of Certain Balance Sheet Accounts Inventories consist primarily of telecommunications systems and parts and are recorded at the lower of average cost or net realizable value. We evaluate the need for write-downs associated with obsolete, slow-moving and nonsalable inventory by reviewing net realizable inventory values on a periodic basis. As a result of our determination to participate in the FCC Reimbursement Program (as defined and described in Note 16, “Government Assistance”), the Company wrote down the net realizable value of certain inventory by approximately $ 1.3 million for the three-month period ended March 31, 2023. The write-off charge is included in Cost of equipment revenue in our Unaudited Condensed Consolidated Statements of Operations. Inventories as of March 31, 2023 and December 31, 2022 were as follows ( in thousands ): March 31, December 31, 2023 2022 Work-in-process component parts $ 36,362 $ 34,840 Finished goods 18,134 14,653 Total inventory $ 54,496 $ 49,493 Prepaid expenses and other current assets as of March 31, 2023 and December 31, 2022 were as follows ( in thousands ): March 31, December 31, 2023 2022 Interest rate caps and receivable $ 27,113 $ 28,496 Contract assets 6,796 6,494 Prepaid inventories 2,917 2,901 Other 9,433 7,209 Total prepaid expenses and other current assets $ 46,259 $ 45,100 Property and equipment as of March 31, 2023 and December 31, 2022 were as follows ( in thousands ): March 31, December 31, 2023 2022 Office equipment, furniture, fixtures and other $ 17,457 $ 17,242 Leasehold improvements 15,419 15,357 Network equipment 180,934 179,363 213,810 211,962 Accumulated depreciation ( 109,125 ) ( 107,367 ) Total property and equipment, net $ 104,685 $ 104,595 Other non-current assets as of March 31, 2023 and December 31, 2022 were as follows ( in thousands ): March 31, December 31, 2023 2022 Contract assets, net of allowances of $ 487 and $ 501 , respectively $ 12,530 $ 13,376 Interest rate caps 17,639 25,578 Revolving credit facility deferred financing costs 1,338 1,445 Other 2,971 2,956 Total other non-current assets $ 34,478 $ 43,355 Accrued liabilities as of March 31, 2023 and December 31, 2022 were as follows ( in thousands ): March 31, December 31, 2023 2022 Accrued interest $ 10,008 $ 9,878 Operating leases 9,445 9,094 Employee compensation and benefits 8,502 19,235 Network equipment 8,434 8,748 Warranty reserve 2,800 2,300 Taxes 2,272 2,282 Other 7,839 8,519 Total accrued liabilities $ 49,300 $ 60,056 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 5. Intangible Assets Our intangible assets are comprised of both indefinite-lived and finite-lived intangible assets. Intangible assets with indefinite lives are not amortized; rather, they are reviewed for impairment at least annually or whenever events or circumstances indicate the carrying value of the asset may not be recoverable. We perform our annual impairment test of our indefinite-lived intangible assets during the fourth quarter of each fiscal year, and the results from the test performed in the fourth quarter of 2022 indicated no impairment. We also reevaluate the useful life of indefinite-lived intangible assets each reporting period to determine whether events and circumstances continue to support an indefinite useful life. As of both March 31, 2023 and December 31, 2022, our goodwill balance was $ 0.6 million. Our intangible assets, other than goodwill, as of March 31, 2023 and December 31, 2022 were as follows ( in thousands, except for weighted average remaining useful life ): As of March 31, 2023 As of December 31, 2022 Weighted Gross Accumulated Net Gross Accumulated Net Amortized intangible assets: Software 6.5 $ 61,468 $( 44,551 ) $ 16,917 $ 59,932 $( 43,950 ) $ 15,982 Other intangible assets 8.0 624 — 624 624 — 624 Service customer relationships 8,081 ( 8,081 ) — 8,081 ( 8,081 ) — OEM and dealer relationships 6,724 ( 6,724 ) — 6,724 ( 6,724 ) — Total amortized intangible assets 76,897 ( 59,356 ) 17,541 75,361 ( 58,755 ) 16,606 Unamortized intangible assets: FCC Licenses 32,283 — 32,283 32,283 — 32,283 Total intangible assets $ 109,180 $( 59,356 ) $ 49,824 $ 107,644 $( 58,755 ) $ 48,889 Amortization expense was $ 0.6 million and $ 1.9 million for the three-month periods ended March 31, 2023 and 2022, respectively. Amortization expense for the remainder of 2023, each of the next four years and thereafter is estimated to be as follows ( in thousands ): Amortization Years ending December 31, Expense 2023 (period from April 1 to December 31) $ 1,918 2024 $ 2,566 2025 $ 2,460 2026 $ 2,361 2027 $ 2,141 Thereafter $ 6,095 Actual future amortization expense could differ from the estimated amount as a result of future investments and other factors. |
Long-Term Debt and Other Liabil
Long-Term Debt and Other Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Other Liabilities | 6. Long-Term Debt and Other Liabilities Long-term debt as of March 31, 2023 and December 31, 2022 was as follows ( in thousands ): March 31, December 31, 2023 2022 Term Loan Facility $ 709,559 $ 711,263 Less: deferred financing costs ( 13,318 ) ( 13,840 ) Less: current portion of long-term debt ( 7,250 ) ( 7,250 ) Total long-term debt $ 688,991 $ 690,173 2021 Credit Agreement On April 30, 2021, Gogo and Gogo Intermediate Holdings LLC (“GIH”) (a wholly owned subsidiary of Gogo) entered into a credit agreement (the “Original 2021 Credit Agreement,” and, as it may be amended, supplemented or otherwise modified from time to time , the “2021 Credit Agreement”) among Gogo, GIH, the lenders and issuing banks party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, which provides for (i) a term loan credit facility (the “Term Loan Facility”) in an aggregate principal amount of $ 725.0 million, issued with a discount of 0.5 %, and (ii) a revolving credit facility (the “Revolving Facility” and together with the Term Loan Facility, the “Facilities”) of up to $ 100.0 million, which includes a letter of credit sub-facility. On February 2, 2023, Gogo and GIH entered into an amendment to the Original 2021 Credit Agreement with Morgan Stanley Senior Funding, Inc., as administrative agent, which replaced all references in the Original 2021 Credit Agreement to LIBOR in respect of the applicable interest rates for the Facilities with an adjusted term secured overnight financing rate as administered by the Federal Reserve Bank of New York (“SOFR”), plus a credit spread adjustment recommended by the Alternative Reference Rates Committee. The Term Loan Facility amortizes in nominal quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity of the Term Loan Facility on April 30, 2028 . There are no amortization payments under the Revolving Facility, and all borrowings under the Revolving Facility mature on April 30, 2026 . The Term Loan Facility bears annual interest at a floating rate measured by reference to, at GIH’s option, either (i) an adjusted term SOFR rate (subject to a floor of 0.75 %) plus an applicable margin of 3.75 % and a credit spread adjustment recommended by the Alternative Reference Rates Committee of 0.11 %, 0.26 % or 0.43 % per annum based on 1-month, 3-month or 6-month term SOFR, respectively or (ii) an alternate base rate plus an applicable margin of 2.75 %. Loans outstanding under the Revolving Facility bear annual interest at a floating rate measured by reference to, at GIH’s option, either (i) an adjusted term SOFR rate (subject to a floor of 0.00 %) plus an applicable margin ranging from 3.25 % to 3.75 % per annum depending on GIH’s senior secured first lien net leverage ratio and a credit spread adjustment recommended by the Alternative Reference Rates Committee of 0.11 %, 0.26 % or 0.43 % per annum based on 1-month, 3-month or 6-month term SOFR, respectively or (ii) an alternate base rate plus an applicable margin ranging from 2.25 % to 2.75 % per annum depending on GIH’s senior secured first lien net leverage ratio. Additionally, unused commitments under the Revolving Facility are subject to a fee ranging from 0.25 % to 0.50 % per annum depending on GIH’s senior secured first lien net leverage ratio. As of March 31, 2023 , the fee for unused commitments under the Revolving Facility was 0.25 % and the applicable margin was 3.25 %. The Facilities may be prepaid at GIH’s option at any time without premium or penalty (other than customary breakage costs), subject to minimum principal payment amount requirements. Subject to certain exceptions and de minimis thresholds, the Term Loan Facility is subject to mandatory prepayments in an amount equal to: • 100 % of the net cash proceeds of certain asset sales, insurance recovery and condemnation events, subject to reduction to 50 % and 0 % if specified senior secured first lien net leverage ratio targets are met; • 100 % of the net cash proceeds of certain debt offerings; and • 50 % of annual excess cash flow (as defined in the 2021 Credit Agreement), subject to reduction to 25 % and 0 % if specified senior secured first lien net leverage ratio targets are met. The 2021 Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants include restrictions on, among other things: incurrence of indebtedness or issuance of disqualified equity interests; incurrence or existence of liens; consolidations or mergers; activities of Gogo and any subsidiary holding a license issued by the Federal Communications Commission; investments, loans, advances, guarantees or acquisitions; asset sales; dividends or other distributions on equity; purchase, redemption or retirement of capital stock; payment or redemption of certain junior indebtedness; entry into other agreements that restrict the ability to incur liens securing the Facilities; and amendment of organizational documents; in each case subject to customary exceptions. The Revolving Facility includes a financial covenant set at a maximum senior secured first lien net leverage ratio of 7.50 :1.00, which will apply if the outstanding amount of loans and unreimbursed letter of credit drawings thereunder at the end of any fiscal quarter exceeds 35 % of the aggregate of all commitments thereunder. The 2021 Credit Agreement contains customary events of default, which, if any of them occurred, would permit or require the principal, premium, if any, and interest on all of the then outstanding obligations under the Facilities to be due and payable immediately and the commitments under the Revolving Facility to be terminated. The Revolving Facility is available for working capital and general corporate purposes of GIH and its subsidiaries and was undrawn as of March 31, 2023 and December 31, 2022. As of March 31, 2023 and December 31, 2022, the outstanding principal amount of the Term Loan Facility was $ 712.3 million and $ 714.1 million, respectively , the unaccreted debt discount was $ 2.7 million and $ 2.8 million, respectively, and the net carrying amount was $ 709.6 million and $ 711.3 million, respectively. On May 3, 2023, the Company paid $100 million of the outstanding principal amount of the Term Loan Facility. We paid approximately $ 19.7 million of loan origination and financing costs related to the Facilities which are being accounted for as deferred financing costs on our Unaudited Condensed Consolidated Balance Sheets and are amortized over the terms of the Facilities. Total amortization expense was $ 0.6 million and $ 0.7 million for the three-month periods ended March 31, 2023 and 2022, respectively, and is included in interest expense in our Unaudited Condensed Consolidated Statements of Operations. As of March 31, 2023 and December 31, 2022, the balance of unamortized deferred financing costs related to the Facilities was $ 14.7 million and $ 15.3 million, respectively. On April 30, 2021, Gogo, GIH, and each direct and indirect wholly-owned U.S. restricted subsidiary of GIH (Gogo and such subsidiaries collectively, the “Guarantors”) entered into a guarantee agreement (the “Guarantee Agreement”) in favor of Morgan Stanley Senior Funding, Inc., as collateral agent (the “Collateral Agent”), whereby GIH and the Guarantors guarantee the obligations under the Facilities and certain other secured obligations as set forth in the Guarantee Agreement, and GIH and the Guarantors entered into a collateral agreement (the “Collateral Agreement”), in favor of the Collateral Agent, whereby GIH and the Guarantors grant a security interest in substantially all of their respective tangible and intangible assets (including the equity interests in each direct material wholly-owned U.S. restricted subsidiary owned by GIH or any Guarantor, and 65% of the equity interests in any non-U.S. subsidiary held directly by GIH or any Guarantor), subject to certain exceptions, to secure the obligations under the Facilities and certain other secured obligations as set forth in the Collateral Agreement. 2022 Convertible Notes In 2018, we issued $ 237.8 million aggregate principal amount of 6.00 % Convertible Senior Notes due 2022 (the “2022 Convertible Notes”) in private offerings to qualified institutional buyers, including pursuant to Rule 144A under the Securities Act, and in concurrent private placements. In 2021, $ 135.0 million aggregate principal amount of 2022 Convertible Notes was converted by holders and settled through the issuance of 24,353,006 shares of common stock. In May 2022, the remaining $ 102.8 million aggregate principal amount of 2022 Convertible Notes was converted by holders into 17,131,332 shares of common stock. Thorndale Farm Private Equity Fund 2, LLC, an entity affiliated with our Chairman and Chief Executive Officer, held $ 8.0 million aggregate principal amount of 2022 Convertible Notes that was converted into 1,333,333 shares of common stock. We incurred approximately $ 8.1 million of issuance costs related to the 2022 Convertible Notes that were amortized over the term of the 2022 Convertible Notes using the effective interest method. Total amortization expense was $ 0.3 million for the three-month period ended March 31, 2022 and is included in Interest expense in the Unaudited Condensed Consolidated Statements of Operations. As of December 31, 2022 , there were no unamortized deferred financing costs related to the 2022 Convertible Notes. See Note 9, “Interest Costs,” for additional information. The 2022 Convertible Notes had an initial conversion rate of 166.6667 common shares per $ 1,000 principal amount of 2022 Convertible Notes, which was equivalent to an initial conversion price of approximately $ 6.00 per share of our common stock. Prior to conversion, the shares of common stock subject to conversion were considered in the diluted earnings per share calculations under the if-converted method if their impact was dilutive. Forward Transactions In connection with the issuance of our 3.75 % Convertible Senior Notes due 2020 (the “2020 Convertible Notes”), we paid approximately $ 140.0 million to enter into prepaid forward stock repurchase transactions (the “Forward Transactions”) with certain financial institutions (the “Forward Counterparties”), pursuant to which we purchased approximately 7.2 million shares of common stock for settlement on or around the March 1, 2020 maturity date for the 2020 Convertible Notes, subject to the ability of each Forward Counterparty to elect to settle all or a portion of its Forward Transactions early. On December 11, 2019, we entered into an amendment to one of the Forward Transactions (the “Amended and Restated Forward Transaction”) to extend the expected settlement date with respect to approximately 2.1 million shares of common stock held by one of the Forward Counterparties, JPMorgan Chase Bank, National Association (the “2022 Forward Counterparty”), to correspond with the May 15, 2022 maturity date for the 2022 Convertible Notes. As a result of the Forward Transactions, total shareholders’ equity within our consolidated balance sheets was reduced by approximately $ 140.0 million. In March 2020, approximately 5.1 million shares of common stock were delivered to us in connection with the Forward Transactions. In April 2021, approximately 1.5 million shares of common stock were delivered to us in connection with the Amended and Restated Forward Transaction. In May 2022, the approximately 0.6 million shares that were remaining under the Amended and Restated Forward Transaction were delivered to us, and there are no additional prepaid forward stock repurchase transactions outstanding. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 7. Derivative Instruments and Hedging Activities We are exposed to interest rate risk on our variable rate borrowings. We currently use interest rate caps to manage our exposure to interest rate changes, and have designated these interest rate caps as cash flow hedges for accounting purposes. Accordingly, the earnings impact of the derivatives designated as cash flow hedges is recorded upon the recognition of the variable interest payments related to the hedged debt. In May 2021, we purchased interest rate caps with an aggregate notional amount of $ 650.0 million for $ 8.6 million. The cost of the interest rate caps will be amortized to interest expense using the caplet method, from the effective date through termination date. We receive payments in the amount calculated pursuant to the caps for any period in which the three-month USD LIBOR rate increases beyond the applicable strike rate . The notional amounts of the interest rate caps periodically decrease over the life of the caps. The notional amounts, strike rates and end dates of the cap agreements are as follows (notional amounts in thousands) : Start Date End Date Notional Strike Rate 7/31/2021 7/31/2023 $ 650,000 0.75 % 7/31/2023 7/31/2024 525,000 0.75 % 7/31/2024 7/31/2025 350,000 1.25 % 7/31/2025 7/31/2026 250,000 2.25 % 7/31/2026 7/31/2027 200,000 2.75 % We record the effective portion of changes in the fair value of our cash flow hedges to other comprehensive income (loss), net of tax, and subsequently reclassify these amounts into earnings in the period during which the hedged transaction is recognized. The amounts included in accumulated other comprehensive income will be reclassified to interest expense in the event the hedges are no longer considered effective, in accordance with ASC 815, Derivatives and Hedging . No gains or losses of our cash flow hedges were considered to be ineffective and reclassified from other comprehensive income (loss) to earnings for the three-month periods ended March 31, 2023 and 2022. We estimate that approximately $ 2.2 million currently recorded in accumulated other comprehensive income (loss) will be recognized in earnings over the next 12 months. We assess the effectiveness of the hedges on an ongoing basis. Cash flows from interest rate caps are classified in the Unaudited Condensed Consolidated Statement of Cash Flows as investing activities. For the three-month period ended March 31, 2023, we recorded a decrease in fair value on the interest rate caps of $ 7.3 million, net of tax of $ 2.3 million, and f or the three-month period ended March 31, 2022 , the increase in fair value was $ 16.1 million, net of tax of $ 5.3 million. Increases and decreases in fair value on interest rate caps above exclude amortization of the purchase price paid for the interest rate caps. When derivatives are used, we are exposed to credit loss in the event of non-performance by the counterparties; however, non-performance is not anticipated. ASC 815, Derivatives and Hedging , requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the balance sheet. The fair values of the interest rate derivatives are based on quoted market prices for similar instruments from commercial banks (based on significant observable inputs - Level 2 inputs). The following table presents the fair value of our interest rate derivatives included in the Unaudited Condensed Consolidated Balance Sheets for the periods presented (in thousands): March 31, December 31, Derivatives designated as hedging instruments Balance sheet location 2023 2022 Current portion of interest rate caps Prepaid expenses and other current assets $ 22,772 $ 24,459 Non-current portion of interest rate caps Other non-current assets $ 17,639 $ 25,578 Fair Value Measurement Our derivative assets and liabilities consist principally of interest rate caps, which are carried at fair value based on significant observable inputs (Level 2 inputs). Derivatives entered into by us are typically executed over-the-counter and are valued using discounted cash flows along with fair value models that primarily use market observable inputs. These models take into account a variety of factors including, where applicable, maturity, interest rate yield curves, and counterparty credit risks. |
Interest Costs
Interest Costs | 3 Months Ended |
Mar. 31, 2023 | |
Text Block [Abstract] | |
Interest Costs | 9. Interest Costs We capitalize a portion of our interest on funds borrowed during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying assets and amortized over the useful lives of the assets. The following is a summary of our interest costs for the three-month periods ended March 31, 2023 and 2022 (in thousands) : For the Three Months 2023 2022 Interest costs charged to expense $ 14,497 $ 9,827 Amortization of deferred financing costs 630 939 Amortization of the purchase price of interest rate caps 134 8 Interest rate cap benefit ( 6,393 ) — Accretion of debt discount 108 115 Interest expense 8,976 10,889 Interest costs capitalized to property and equipment 497 40 Interest costs capitalized to software 157 97 Total interest costs $ 9,630 $ 11,026 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | 10. Leases Operating and Financing Leases — We determine whether a contract contains a lease at contract inception. Lease liabilities are calculated using a discount rate based on our incremental borrowing rate at lease commencement. We have operating lease agreements primarily related to cell sites and office space. Certain cell site and office space leases have renewal option terms that have been deemed reasonably certain to be exercised. These renewal options extend a lease by up to 15 years . We recognize operating lease expense on a straight-line basis over the lease term. As of March 31, 2023, there were no significant leases which had not commenced. The following is a summary of our lease expense included in the Unaudited Condensed Consolidated Statements of Operations (in thousands) : For the Three Months 2023 2022 Operating lease cost $ 3,938 $ 3,546 Financing lease cost: Amortization of leased assets 39 38 Interest on lease liabilities 5 13 Total lease cost $ 3,982 $ 3,597 Other information regarding our leases is as follows (in thousands, except lease terms and discount rates) : For the Three Months 2023 2022 Supplemental cash flow information Cash paid for amounts included in measurement of lease liabilities: Operating cash flows used in operating leases $ 3,969 $ 3,496 Operating cash flows used in financing leases $ 5 $ 13 Financing cash flows used in financing leases $ 57 $ 43 Non-cash items: Operating leases obtained $ 718 $ 2,269 Financing leases obtained $ — $ — Weighted average remaining lease term Operating leases 8 years 9 years Financing leases 1 year 1 year Weighted average discount rate Operating leases 6.7 % 6.9 % Financing leases 16.6 % 17.9 % Annual future minimum lease payments as of March 31, 2023 (in thousands) : Years ending December 31, Operating Financing 2023 (period from April 1 to December 31) $ 10,877 $ 79 2024 15,256 4 2025 14,402 2 2026 14,229 — 2027 13,377 — Thereafter 42,644 — Total future minimum lease payments 110,785 85 Less: Amount representing interest ( 24,075 ) ( 4 ) Present value of net minimum lease payments $ 86,710 $ 81 Reported as of March 31, 2023 Accrued liabilities $ 9,445 $ 76 Non-current operating lease liabilities 77,265 — Other non-current liabilities — 5 Total lease liabilities $ 86,710 $ 81 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Contractual Commitments – We have agreements with various vendors under which we have remaining commitments to purchase hardware components and development services. Such commitments will become payable as we receive the hardware components, or as development services are provided. In June 2022, we and Hughes entered into a supply and product support agreement (the “SPSA”), providing for our purchase from Hughes of airborne antennas for use on a LEO satellite network, and the performance by Hughes of services related thereto. Under the SPSA, we commit to purchase, over a seven-year period that will begin on completion of a project milestone currently expected to occur at the end of 2024, antennas with an estimated aggregate purchase price of approximately $ 170 million. During the contractual seven-year period, Hughes may not sell substantially similar equipment to other purchasers in our primary target market. In March 2023, we amended the SPSA, pursuant to which, we committed to purchase, over a seven-year period that will begin on completion of a project milestone currently expected to occur in mid-2025, additional equipment with an estimated aggregate purchase price of approximately $ 102 million. Indemnifications and Guarantees – In accordance with Delaware law, we indemnify our officers and directors for certain events or occurrences while the officer or director is, or was, serving at our request in such capacity. The maximum potential amount of future payments we could be required to make under this indemnification is uncertain and may be unlimited, depending upon circumstances. However, our Directors’ and Officers’ insurance does provide coverage for certain of these losses. In the ordinary course of business, we may occasionally enter into agreements pursuant to which we may be obligated to pay for the failure of the performance of others, such as the use of corporate credit cards issued to employees. Based on historical experience, we believe that the risk of sustaining any material loss related to such guarantees is remote. We have entered into a number of agreements pursuant to which we indemnify the other party for losses and expenses suffered or incurred in connection with any patent, copyright, or trademark infringement or misappropriation claim asserted by a third party with respect to our equipment or services. The maximum potential amount of future payments we could be required to make under these indemnification agreements is uncertain and is typically not limited by the terms of the agreements. Derivative Litigation – On September 25, 2018 and September 26, 2018 , two purported stockholders of the Company filed substantively identical derivative lawsuits in the Court, styled Nanduri v. Gogo Inc. and Hutsenpiller v. Gogo Inc., respectively. Both lawsuits were purportedly brought derivatively on behalf of us and name us as a nominal defendant and name as defendants each then-current member of the Company’s Board of Directors, its former Chief Executive Officer and Chief Financial Officer, its then-current President, Commercial Aviation, and its current Chief Executive Officer and Chief Financial Officer. The complaints assert claims under Section 14(a) of the Securities Exchange Act of 1934, breach of fiduciary duty, unjust enrichment, and waste of corporate assets, and allege misrepresentations or omissions by us purporting to relate to the 2Ku antenna’s reliability and installation and remediation costs, as well as allegedly excessive bonuses, stock options, and other compensation paid to current officers and directors and excessive severance paid to former officers. The plaintiffs seek to recover, on our behalf, an unspecified amount of damages from the individual defendants. The two lawsuits were consolidated and were stayed pending a final disposition of the motion to dismiss in the class action suit and remain stayed. In addition, a purported stockholder has sent a letter to the Company’s Board of Directors, dated June 21, 2021, demanding based on substantially the same allegations, that the Company sue certain current and former Officers for, inter alia , breach of fiduciary duty. The two derivative lawsuits and the litigation demand letter are collectively referred to herein as the “Derivative Matters” and the plaintiffs in the two derivative lawsuits and the purported stockholder who sent the litigation demand letter are collectively referred to herein as the “Stockholders.” On January 5, 2023, following mediation, the defendants and the Stockholders entered into a Stipulation and Agreement of Settlement (the “Derivative Settlement”) under which the Company, in consideration of dismissal of the two derivative lawsuits with prejudice and a release of all claims asserted against the Company and the individual defendants in the Derivative Matters, will implement certain corporate governance initiatives and cause its D&O insurance carrier to pay the Stockholders’ attorneys’ fees. Under the terms of the Derivative Settlement, the defendants will not be required to pay any damages. We had accrued a liability for attorneys’ fees within Accrued liabilities and a corresponding receivable in Prepaid expenses and other current assets in the Unaudited Condensed Consolidated Balance Sheets as of December 21, 2022. On February 1, 2023, the Court granted preliminary approval of the proposed Derivative Settlement, approved various notices to be disseminated to the Company’s stockholders and the schedule for dissemination. On April 11, 2023, the Court issued final judgment approving the Derivative Settlement. The Company released the accrued liability and corresponding receivable for attorneys’ fees as of March 31, 2023. Pursuant to the terms of the Derivative Settlement, the Company is required to implement certain governance changes by May 11, 2023. SmartSky Litigation – On February 28, 2022 , SmartSky Networks, LLC brought suit against Gogo Inc. and its subsidiary Gogo Business Aviation LLC in the U.S. District Court for the District of Delaware alleging that Gogo 5G infringes four patents owned by the plaintiff. On February 21, 2023, the plaintiff amended its complaint to allege that Gogo 5G infringes two additional patents recently issued to the plaintiff. The suit seeks an unspecified amount of compensatory damages as well as treble damages for alleged willful infringement and reimbursement of plaintiff's costs, disbursements and attorneys' fees. Under a schedule agreed upon by the parties, fact discovery and claim construction proceedings will be substantially completed by the end of 2023 or early 2024, and expert discovery by early-to-mid 2024, with dispositive motions to follow. A trial date has been scheduled for April 14, 2025. Also on February 28, 2022, the plaintiff filed a motion (the “PI Motion”) requesting that the Court preliminarily enjoin the Company from making, using, offering to sell or selling the Gogo 5G system. On September 26, 2022, the Court issued an order denying the PI Motion. The plaintiff has appealed the denial to the U.S. Court of Appeals for the Federal Circuit. Briefing for the appeal is complete and the appellate court scheduled the oral argument for June 5, 2023. We believe that the plaintiff’s claims are without merit and intend to continue to vigorously defend our position in the infringement suit and defend against the appeal. The outcomes of the appeal and the underlying litigation are inherently uncertain. No amounts have been accrued for any potential losses under this matter, as we cannot reasonably predict the outcome of the litigation or any potential losses. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | 8. Fair Value of Financial Assets and Liabilities A three-tier fair value hierarchy has been established which prioritizes the inputs used in measuring fair value. These tiers include: • Level 1 - defined as observable inputs such as quoted prices for identical assets or liabilities in active markets; • Level 2 - defined as observable inputs other than Level 1 inputs such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Refer to Note 7, “Derivative Instruments and Hedging Activities,” for fair value information relating to our interest rate caps. Long-Term Debt: As of March 31, 2023 and December 31, 2022, our only financial asset or liability disclosed but not measured at fair value is the Term Loan Facility, which is reflected on the Unaudited Condensed Consolidated Balance Sheets at cost. The fair value measurement is classified as Level 2 within the fair value hierarchy since it is based on quoted market prices of our instrument in markets that are not active. We estimated the fair value of the Term Loan Facility by calculating the upfront cash payment a market participant would require to assume the obligation. The upfront cash payment used in the calcula tion of fair value on our March 31, 2023 Unaudited Condensed Consolidated Balance Sheets, excluding any issuance costs, is the amount that a market participant would be willing to lend at such date to an entity with a credit rating similar to ours and that would allow such an entity to achieve sufficient cash inflows to cover the scheduled cash outflows under the Term Loan Facility. The fair value and carrying value of long-term debt as of March 31, 2023 and December 31, 2022 were as follows (in thousands) : March 31, 2023 December 31, 2022 Fair Value (1) Carrying Fair Value (1) Carrying Term Loan Facility $ 708,000 $ 709,559 (2) $ 708,000 $ 711,263 (2) (1) Fair value amounts are rounded to the nearest million. (2) Carrying value of the Term Loan Facility reflects the unaccreted debt discount of $ 2.7 million and $ 2.8 million as of March 31, 2023 and December 31, 2022, respectively. See Note 6, “Long-Term Debt and Other Liabilities,” for further information. |
Income Tax
Income Tax | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 12. Income Tax The effective income tax rates for the three-month periods ended March 31, 2023 and 2022 were 17.7 % and 8.0 %, respectively. For the three-month period ended March 31, 2023 , our effective income tax rate was lower than the U.S. federal statutory rate of 21 % primarily due to a partial release of the valuation allowance on our deferred income tax assets and tax benefits for research and development tax credits and stock-based compensation, partially offset by state income taxes. For the three-month period ended March 31, 2022 , our effective income tax rate was lower than the U.S. federal statutory rate of 21 % primarily due to tax benefits for stock-based compensation and a partial release of the valuation allowance on our deferred income tax assets. We regularly assess the need for a valuation allowance related to our deferred income tax assets to determine, based on the weight of the available positive and negative evidence, whether it is more likely than not that some or all of such deferred assets will not be realized. In our assessments, the Company considers recent financial operating results, the scheduled expiration of our net operating losses, potential sources of taxable income, the reversal of existing taxable differences, taxable income in prior carryback years, if permitted under tax law, and tax planning strategies. The remaining valuation allowance is still required for deferred income tax assets related to certain state and foreign net operating losses (“NOLs”), capital losses, and the Section 163(j) interest limitation carryforward as it was more likely than not as of March 31, 2023 that these deferred income tax assets will not be realized. However, if we continue to sustain our current operating performance, additional reversals of our valuation allowance could occur in fiscal year 2023. We are subject to taxation and file income tax returns in the United States federal jurisdiction and many states and Canada. With few exceptions, as of March 31, 2023 we are no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2019. We record penalties and interest relating to uncertain tax positions in the income tax provision line item in the Unaudited Condensed Consolidated Statements of Operations. No penalties or interest related to uncertain tax positions were recorded for the three-month periods ended March 31, 2023 and 2022. As of March 31, 2023 and December 31, 2022 , we did no t have a liability recorded for interest or potential penalties. |
Stock-Based Compensation and 40
Stock-Based Compensation and 401(k) Plan | 3 Months Ended |
Mar. 31, 2023 | |
Text Block [Abstract] | |
Stock-Based Compensation and 401(k) Plan | 13. Stock-Based Compensation and 401(k) Plan Stock-Based Compensation — As of March 31, 2023 , we maintained three stock-based incentive compensation plans (“Stock Plans”), as well as an Employee Stock Purchase Plan (“ESPP”). See Note 14, “Stock-Based Compensation and 401(k) Plan,” in our 2022 10-K for further information regarding these plans. The majority of our equity grants are awarded on an annual basis. For the three-month period ended March 31, 2023 , no options to purchase shares of common stock were granted, options to purchase 68,520 shares of common stock were exercised, 1,875 options to purchase shares of common stock were forfeited and no options to purchase shares of common stock expired. For the three-month period ended March 31, 2023 , 1,346,428 Restricted Stock Units (“RSUs”) were granted, 1,013,614 RSUs vested and 40,561 RSUs were forfeited. The fair value of the RSUs granted during the three-month period ended March 31, 2023 was approximately $ 22.3 million , which will generally be recognized over a period of four years . For the three-month period ended March 31, 2023 , 31,804 deferred stock units were granted and 55,999 vested. The fair value of the deferred stock units granted during the three-month period ended March 31, 2023 was approximately $ 0.5 million , which was recognized immediately. For the three-month period ended March 31, 2023 , 12,582 shares of common stock were issued under the ESPP. The following is a summary of our stock-based compensation expense by operating expense line in the Unaudited Condensed Consolidated Statements of Operations (in thousands) : For the Three Months 2023 2022 Cost of service revenue $ 343 $ 186 Cost of equipment revenue 287 208 Engineering, design and development 754 494 Sales and marketing 738 549 General and administrative 2,919 2,570 Total stock-based compensation expense $ 5,041 $ 4,007 401(k) Plan — Under our 401(k) plan, all employees who are eligible to participate are entitled to make tax-deferred contributions, subject to Internal Revenue Service limitations. We match 100 % of the employee’s first 4 % of contributions made, subject to annual limitations. Our matching contributions were $ 0.5 million for both three-month periods ended March 31, 2023 and 2022 . |
Research and Development Costs
Research and Development Costs | 3 Months Ended |
Mar. 31, 2023 | |
Research and Development [Abstract] | |
Research and Development Costs | 14. Research and Development Costs Expenditures for research and development are charged to expense as incurred and totaled $ 7.9 million and $ 5.4 million , respectively, during the three-month periods ended March 31, 2023 and 2022 . Research and development costs are reported as Engineering, design and development expenses in our Unaudited Condensed Consolidated Statements of Operations. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2023 | |
AOCI Attributable to Parent [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 15. Accumulated Other Comprehensive Income (Loss) The following is a summary of changes in accumulated other comprehensive income (loss) by component (in thousands): Change in Currency Fair Value of Translation Cash Flow Adjustment Hedges Total Balance at January 1, 2023 $ ( 1,225 ) $ 31,353 $ 30,128 Other comprehensive income (loss) before reclassifications 75 ( 2,439 ) ( 2,364 ) Less: income realized and reclassified to earnings — 4,721 4,721 Net current period comprehensive income (loss) 75 ( 7,160 ) ( 7,085 ) Balance at March 31, 2023 $ ( 1,150 ) $ 24,193 $ 23,043 Change in Currency Fair Value of Translation Cash Flow Adjustment Hedges Total Balance at January 1, 2022 $ ( 960 ) $ 2,749 $ 1,789 Other comprehensive income (loss) before reclassifications 111 16,053 16,164 Less: income realized and reclassified to earnings — ( 8 ) ( 8 ) Net current period comprehensive income (loss) 111 16,061 16,172 Balance at March 31, 2022 $ ( 849 ) $ 18,810 $ 17,961 |
Government Assistance
Government Assistance | 3 Months Ended |
Mar. 31, 2023 | |
Government Assistance [Abstract] | |
Government Assistance | 16. Government Assistance Federal Communications Commission's ("FCC") Secure and Trusted Communications Networks Reimbursement Program (the “FCC Reimbursement Program”) On July 15, 2022, the Company was notified that it was approved for participation in the FCC Reimbursement Program, designed to reimburse providers of advanced communications services for reasonable costs incurred in the required removal, replacement, and disposal of covered communications equipment or services, that have been deemed to pose a national security risk, from their networks. Pursuant to the FCC Reimbursement Program, the FCC approved up to approximately $ 334 million in reimbursements to the Company to cover documented and approved costs to (i) remove and securely destroy all ZTE communications equipment and services in the Company’s terrestrial U.S. networks and replace such equipment and (ii) remove and replace certain equipment installed on aircraft operated by the Company’s ATG customers that is not compatible with the terrestrial equipment that will replace ZTE equipment. Due to a shortfall in the amount appropriated by Congress to fund the FCC Reimbursement Program, approximately $ 132 million of the approved amount is currently allocated to the Company under the program. If Congress appropriates additional funds for this purpose, the allocations of the Company and other approved applicants will be increased pro rata . Program participants are subject to a number of conditions and requirements under the FCC’s rules including a requirement that they submit their first reimbursement request by July 15, 2023 and certify that they have developed a plan to permanently remove, replace and dispose of covered equipment or services within one year following the first reimbursement request. The rules permit participants to petition the FCC for one or more six-month extensions of the completion deadline. While the Company reserves the right not to proceed as it has until July 15, 2023 to submit its first reimbursement claim, at the end of the first quarter of 2023, the Company determined that it will participate in the partially funded FCC Reimbursement Program. We are currently assessing the impact of this program on our financial statements and as of March 31, 2023, we have not recorded a receivable from the FCC related to the FCC Reimbursement Program. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation - The accompanying Unaudited Condensed Consolidated Financial Statements and notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in conformity with Article 10 of Regulation S-X promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements and should be read in conjunction with our annual audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2023 (the “2022 10-K”). These Unaudited Condensed Consolidated Financial Statements reflect, in the opinion of management, all material adjustments (which include normal recurring adjustments) necessary to fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented. The results of operations and cash flows for the three-month period ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023. We had one class of common stock outstanding as of March 31, 2023 and December 31, 2022 . |
Use of Estimates | Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates the significant estimates and bases such estimates on historical experience and various other assumptions believed to be reasonable under the circumstances. However, actual results could differ materially from those estimates. Shareholder Rights Plan – On September 23, 2020, our Board of Directors adopted a Section 382 Rights Agreement (the “Rights Agreement”), between the Company and Computershare Trust Company, N.A., as rights agent. The Rights Agreement is intended to reduce the likelihood of an ownership change under Section 382 of the Internal Revenue Code of 1986, as amended, by deterring any person or group from acquiring beneficial ownership of 4.9 % or more of the shares of the Company’s common stock then-outstanding. On April 27, 2023, the Board of Directors granted a request by the Vanguard Group Inc. (“Vanguard”) that it be deemed an “Exempt Person” under the Rights Agreement, subject to Vanguard satisfying certain ownership conditions, including that neither Vanguard Group Inc. nor any subsidiary or individual fund will have an economic interest of 4.9 % or more of the Company’s common stock. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue Disaggregated by Category | The following table presents our revenue disaggregated by category (in thousands) : For the Three Months 2023 2022 Service revenue Connectivity $ 77,246 $ 69,495 Entertainment and other 1,253 1,172 Total service revenue $ 78,499 $ 70,667 Equipment revenue ATG $ 15,556 $ 17,948 Narrowband satellite 2,651 3,206 Other 1,891 929 Total equipment revenue $ 20,098 $ 22,083 Customer type Aircraft owner/operator/service provider $ 78,499 $ 70,667 OEM and aftermarket dealer 20,098 22,083 Total revenue $ 98,597 $ 92,750 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share for the three-month periods ended March 31, 2023 and 2022; however, for the reasons and periods described above, the shares of common stock associated with the Forward Transactions were excluded from the computation of basic earnings per share ( in thousands, except per share amounts ): For the Three Months Ended March 31, 2023 2022 Income (Numerator) Shares (Denominator) Per Share Amount Income (Numerator) Shares (Denominator) Per Share Amount Net income $ 20,449 $ 22,196 Less: participation rights on Forward Transactions — 113 Basic earnings per share Undistributed income $ 20,449 129,136 $ 0.16 $ 22,083 111,414 $ 0.20 Effect of dilutive securities Stock-based compensation — 4,466 — 5,550 2022 Convertible Notes — — 1,819 17,131 Diluted earnings per share Undistributed income and assumed conversions $ 20,449 133,602 $ 0.15 $ 23,902 134,095 $ 0.18 Earnings per share - basic $ 0.16 $ 0.20 Earnings per share - diluted $ 0.15 $ 0.18 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventories | Inventories as of March 31, 2023 and December 31, 2022 were as follows ( in thousands ): March 31, December 31, 2023 2022 Work-in-process component parts $ 36,362 $ 34,840 Finished goods 18,134 14,653 Total inventory $ 54,496 $ 49,493 |
Composition of Certain Balanc_2
Composition of Certain Balance Sheet Accounts (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Components of Inventories | Inventories as of March 31, 2023 and December 31, 2022 were as follows ( in thousands ): March 31, December 31, 2023 2022 Work-in-process component parts $ 36,362 $ 34,840 Finished goods 18,134 14,653 Total inventory $ 54,496 $ 49,493 |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets as of March 31, 2023 and December 31, 2022 were as follows ( in thousands ): March 31, December 31, 2023 2022 Interest rate caps and receivable $ 27,113 $ 28,496 Contract assets 6,796 6,494 Prepaid inventories 2,917 2,901 Other 9,433 7,209 Total prepaid expenses and other current assets $ 46,259 $ 45,100 |
Schedule of Property and Equipment | Property and equipment as of March 31, 2023 and December 31, 2022 were as follows ( in thousands ): March 31, December 31, 2023 2022 Office equipment, furniture, fixtures and other $ 17,457 $ 17,242 Leasehold improvements 15,419 15,357 Network equipment 180,934 179,363 213,810 211,962 Accumulated depreciation ( 109,125 ) ( 107,367 ) Total property and equipment, net $ 104,685 $ 104,595 |
Schedule of Other Non-Current Assets | Other non-current assets as of March 31, 2023 and December 31, 2022 were as follows ( in thousands ): March 31, December 31, 2023 2022 Contract assets, net of allowances of $ 487 and $ 501 , respectively $ 12,530 $ 13,376 Interest rate caps 17,639 25,578 Revolving credit facility deferred financing costs 1,338 1,445 Other 2,971 2,956 Total other non-current assets $ 34,478 $ 43,355 |
Schedule of Accrued Liabilities | Accrued liabilities as of March 31, 2023 and December 31, 2022 were as follows ( in thousands ): March 31, December 31, 2023 2022 Accrued interest $ 10,008 $ 9,878 Operating leases 9,445 9,094 Employee compensation and benefits 8,502 19,235 Network equipment 8,434 8,748 Warranty reserve 2,800 2,300 Taxes 2,272 2,282 Other 7,839 8,519 Total accrued liabilities $ 49,300 $ 60,056 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, Other than Goodwill | Our intangible assets, other than goodwill, as of March 31, 2023 and December 31, 2022 were as follows ( in thousands, except for weighted average remaining useful life ): As of March 31, 2023 As of December 31, 2022 Weighted Gross Accumulated Net Gross Accumulated Net Amortized intangible assets: Software 6.5 $ 61,468 $( 44,551 ) $ 16,917 $ 59,932 $( 43,950 ) $ 15,982 Other intangible assets 8.0 624 — 624 624 — 624 Service customer relationships 8,081 ( 8,081 ) — 8,081 ( 8,081 ) — OEM and dealer relationships 6,724 ( 6,724 ) — 6,724 ( 6,724 ) — Total amortized intangible assets 76,897 ( 59,356 ) 17,541 75,361 ( 58,755 ) 16,606 Unamortized intangible assets: FCC Licenses 32,283 — 32,283 32,283 — 32,283 Total intangible assets $ 109,180 $( 59,356 ) $ 49,824 $ 107,644 $( 58,755 ) $ 48,889 |
Summary of Amortization Expenses | Amortization expense for the remainder of 2023, each of the next four years and thereafter is estimated to be as follows ( in thousands ): Amortization Years ending December 31, Expense 2023 (period from April 1 to December 31) $ 1,918 2024 $ 2,566 2025 $ 2,460 2026 $ 2,361 2027 $ 2,141 Thereafter $ 6,095 |
Long-Term Debt and Other Liab_2
Long-Term Debt and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt as of March 31, 2023 and December 31, 2022 was as follows ( in thousands ): March 31, December 31, 2023 2022 Term Loan Facility $ 709,559 $ 711,263 Less: deferred financing costs ( 13,318 ) ( 13,840 ) Less: current portion of long-term debt ( 7,250 ) ( 7,250 ) Total long-term debt $ 688,991 $ 690,173 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts Strike Rates and End Dates of the Cap Agreements | The notional amounts, strike rates and end dates of the cap agreements are as follows (notional amounts in thousands) : Start Date End Date Notional Strike Rate 7/31/2021 7/31/2023 $ 650,000 0.75 % 7/31/2023 7/31/2024 525,000 0.75 % 7/31/2024 7/31/2025 350,000 1.25 % 7/31/2025 7/31/2026 250,000 2.25 % 7/31/2026 7/31/2027 200,000 2.75 % |
Schedule of Derivative Assets at Fair Value | The following table presents the fair value of our interest rate derivatives included in the Unaudited Condensed Consolidated Balance Sheets for the periods presented (in thousands): March 31, December 31, Derivatives designated as hedging instruments Balance sheet location 2023 2022 Current portion of interest rate caps Prepaid expenses and other current assets $ 22,772 $ 24,459 Non-current portion of interest rate caps Other non-current assets $ 17,639 $ 25,578 |
Interest Costs (Tables)
Interest Costs (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Text Block [Abstract] | |
Summary of Interest Costs | The following is a summary of our interest costs for the three-month periods ended March 31, 2023 and 2022 (in thousands) : For the Three Months 2023 2022 Interest costs charged to expense $ 14,497 $ 9,827 Amortization of deferred financing costs 630 939 Amortization of the purchase price of interest rate caps 134 8 Interest rate cap benefit ( 6,393 ) — Accretion of debt discount 108 115 Interest expense 8,976 10,889 Interest costs capitalized to property and equipment 497 40 Interest costs capitalized to software 157 97 Total interest costs $ 9,630 $ 11,026 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Lease expense included in the unaudited condensed consolidated statements of operations | The following is a summary of our lease expense included in the Unaudited Condensed Consolidated Statements of Operations (in thousands) : For the Three Months 2023 2022 Operating lease cost $ 3,938 $ 3,546 Financing lease cost: Amortization of leased assets 39 38 Interest on lease liabilities 5 13 Total lease cost $ 3,982 $ 3,597 |
Schedule includes other information about leases | Other information regarding our leases is as follows (in thousands, except lease terms and discount rates) : For the Three Months 2023 2022 Supplemental cash flow information Cash paid for amounts included in measurement of lease liabilities: Operating cash flows used in operating leases $ 3,969 $ 3,496 Operating cash flows used in financing leases $ 5 $ 13 Financing cash flows used in financing leases $ 57 $ 43 Non-cash items: Operating leases obtained $ 718 $ 2,269 Financing leases obtained $ — $ — Weighted average remaining lease term Operating leases 8 years 9 years Financing leases 1 year 1 year Weighted average discount rate Operating leases 6.7 % 6.9 % Financing leases 16.6 % 17.9 % |
Annual future minimum lease payments | Annual future minimum lease payments as of March 31, 2023 (in thousands) : Years ending December 31, Operating Financing 2023 (period from April 1 to December 31) $ 10,877 $ 79 2024 15,256 4 2025 14,402 2 2026 14,229 — 2027 13,377 — Thereafter 42,644 — Total future minimum lease payments 110,785 85 Less: Amount representing interest ( 24,075 ) ( 4 ) Present value of net minimum lease payments $ 86,710 $ 81 Reported as of March 31, 2023 Accrued liabilities $ 9,445 $ 76 Non-current operating lease liabilities 77,265 — Other non-current liabilities — 5 Total lease liabilities $ 86,710 $ 81 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value and Carrying Value of Long-Term Debt | The fair value and carrying value of long-term debt as of March 31, 2023 and December 31, 2022 were as follows (in thousands) : March 31, 2023 December 31, 2022 Fair Value (1) Carrying Fair Value (1) Carrying Term Loan Facility $ 708,000 $ 709,559 (2) $ 708,000 $ 711,263 (2) |
Stock-Based Compensation and _2
Stock-Based Compensation and 401(k) Plan (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Text Block [Abstract] | |
Summary of Stock-Based Compensation Expense by Operating Expense | The following is a summary of our stock-based compensation expense by operating expense line in the Unaudited Condensed Consolidated Statements of Operations (in thousands) : For the Three Months 2023 2022 Cost of service revenue $ 343 $ 186 Cost of equipment revenue 287 208 Engineering, design and development 754 494 Sales and marketing 738 549 General and administrative 2,919 2,570 Total stock-based compensation expense $ 5,041 $ 4,007 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
AOCI Attributable to Parent [Abstract] | |
Summary of changes in accumulated other comprehensive income (loss) | The following is a summary of changes in accumulated other comprehensive income (loss) by component (in thousands): Change in Currency Fair Value of Translation Cash Flow Adjustment Hedges Total Balance at January 1, 2023 $ ( 1,225 ) $ 31,353 $ 30,128 Other comprehensive income (loss) before reclassifications 75 ( 2,439 ) ( 2,364 ) Less: income realized and reclassified to earnings — 4,721 4,721 Net current period comprehensive income (loss) 75 ( 7,160 ) ( 7,085 ) Balance at March 31, 2023 $ ( 1,150 ) $ 24,193 $ 23,043 Change in Currency Fair Value of Translation Cash Flow Adjustment Hedges Total Balance at January 1, 2022 $ ( 960 ) $ 2,749 $ 1,789 Other comprehensive income (loss) before reclassifications 111 16,053 16,164 Less: income realized and reclassified to earnings — ( 8 ) ( 8 ) Net current period comprehensive income (loss) 111 16,061 16,172 Balance at March 31, 2022 $ ( 849 ) $ 18,810 $ 17,961 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Stock-Based Compensation Expense by Operating Expense | The following is a summary of our stock-based compensation expense by operating expense line in the Unaudited Condensed Consolidated Statements of Operations (in thousands) : For the Three Months 2023 2022 Cost of service revenue $ 343 $ 186 Cost of equipment revenue 287 208 Engineering, design and development 754 494 Sales and marketing 738 549 General and administrative 2,919 2,570 Total stock-based compensation expense $ 5,041 $ 4,007 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 USD ($) Classofcommonstock | Dec. 31, 2022 USD ($) Classofcommonstock | Sep. 23, 2020 | |
Schedule Of Summary Of Significant Accounting Policies [Line Items] | |||
Number of classes of common stock outstanding | Classofcommonstock | 1 | 1 | |
Operating Lease, Liability | $ 86,710 | ||
Right of use assets | $ 73,468 | $ 75,261 | |
Vanguard Group Inc [Member] | |||
Schedule Of Summary Of Significant Accounting Policies [Line Items] | |||
Ownership interest | 4.90% | 4.90% |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 USD ($) Customer | Mar. 31, 2022 Customer | Dec. 31, 2022 USD ($) Customer | |
Revenue From Contracts With Customers [Line Items] | |||
Transaction price allocated to remaining performance obligations | $ 91 | ||
Equipment revenue | $ 17 | ||
Future equipment revenue recognition period | two years | ||
Number of customers meeting concentration risk threshold | Customer | 0 | 0 | 0 |
Airline [Member] | Revenue [Member] | Customer Concentration Risk [Member] | |||
Revenue From Contracts With Customers [Line Items] | |||
Contract assets, current and non-current | $ 19.3 | $ 19.9 | |
Percentage of benchmark | 10% | 10% | |
Airline [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||
Revenue From Contracts With Customers [Line Items] | |||
Percentage of benchmark | 10% | 10% | |
Accounting Standards Update 2014-09 [Member] | |||
Revenue From Contracts With Customers [Line Items] | |||
Deferred revenue, current and non-current | $ 2.4 | $ 3.4 | |
Connectivity And Entertainment Service Revenues | |||
Revenue From Contracts With Customers [Line Items] | |||
Transaction price allocated to remaining performance obligations | $ 74 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Revenue Disaggregated by Category (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation Of Revenue [Line Items] | ||
Disaggregation of revenue | $ 98,597 | $ 92,750 |
Aircraft Owner Operator [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Disaggregation of revenue | 78,499 | 70,667 |
OEM and Aftermarket Dealer [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Disaggregation of revenue | 20,098 | 22,083 |
Cost of Service Revenue [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Disaggregation of revenue | 78,499 | 70,667 |
Cost of Equipment Revenue [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Disaggregation of revenue | 20,098 | 22,083 |
Connectivity [Member] | Cost of Service Revenue [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Disaggregation of revenue | 77,246 | 69,495 |
Entertainment And Other [Member] | Cost of Service Revenue [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Disaggregation of revenue | 1,253 | 1,172 |
A T G | Cost of Equipment Revenue [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Disaggregation of revenue | 15,556 | 17,948 |
Other Product Or Service | Cost of Equipment Revenue [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Disaggregation of revenue | $ 1,891 | $ 929 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Forward stock repurchase transaction shares, excluded from dilution effect | 0 | 600,000 |
Weighted-average number of shares | 600,000 | 200,000 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net income from continuing operations | $ 20,449 | $ 22,196 |
Less: Participation rights on Forward Transactions allocated to continuing operations | $ 0 | $ 113 |
Incremental Common Shares Attributable to Dilutive Effect of Share-Based Payment Arrangements | 4,466 | 5,550 |
Income loss from continuing operations basic shares | 129,136,000 | 111,414,000 |
Income loss from continuing operations diluted shares | 133,602,000 | 134,095,000 |
Dilutive securities, effect on basic earnings per share, options and restrictive stock units | $ 0 | $ 0 |
Undistributed income from continuing operations and assumed conversions, Diluted | 20,449 | 23,902 |
Undistributed income from continuing operations and assumed conversions, Basic | $ 20,449 | $ 22,083 |
Diluted | $ 0.15 | $ 0.18 |
Basic | $ 0.16 | $ 0.20 |
2022 Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Amount of dilutive securities convertible notes | $ 0 | $ 1,819 |
Dilutive securities effect on convertible notes from discontinuing operations | 0 | 17,131 |
Composition of Certain Balanc_3
Composition of Certain Balance Sheet Accounts - Schedule of Components of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Work-in-process component parts | $ 36,362 | $ 34,840 |
Finished goods | 18,134 | 14,653 |
Total inventory | $ 54,496 | $ 49,493 |
Composition of Certain Balanc_4
Composition of Certain Balance Sheet Accounts - Schedule of Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Prepaid Expense and Other Assets [Abstract] | ||
Interest rate caps and receivable | $ 27,113 | $ 28,496 |
Contract assets | 6,796 | 6,494 |
Prepaid inventories | 2,917 | 2,901 |
Other | 9,433 | 7,209 |
Total prepaid expenses and other current assets | $ 46,259 | $ 45,100 |
Composition of Certain Balanc_5
Composition of Certain Balance Sheet Accounts - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 213,810 | $ 211,962 |
Accumulated depreciation | (109,125) | (107,367) |
Total property and equipment, net | 104,685 | 104,595 |
Office Equipment, Furniture, Fixtures and Other [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 17,457 | 17,242 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,419 | 15,357 |
Network Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 180,934 | $ 179,363 |
Composition of Certain Balanc_6
Composition of Certain Balance Sheet Accounts - Schedule of Other Non-Current Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Other Assets, Noncurrent [Abstract] | ||
Contract assets, net of allowances of $487 and $501, respectively | $ 12,530 | $ 13,376 |
Interest rate caps | 17,639 | 25,578 |
Revolving credit facility deferred financing costs | 1,338 | 1,445 |
Other | 2,971 | 2,956 |
Total other non-current assets | $ 34,478 | $ 43,355 |
Composition of Certain Balanc_7
Composition of Certain Balance Sheet Accounts - Schedule of Other Non-Current Assets (Parenthetical) (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Other Assets, Noncurrent [Abstract] | ||
Contract with Customer, Asset, Accumulated Allowance for Credit Loss, Noncurrent | $ 487 | $ 501 |
Composition of Certain Balanc_8
Composition of Certain Balance Sheet Accounts - Schedule of Accrued Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Accrued Liabilities, Current [Abstract] | ||
Accrued interest | $ 10,008 | $ 9,878 |
Operating leases | 9,445 | 9,094 |
Employee compensation and benefits | 8,502 | 19,235 |
Network equipment | 8,434 | 8,748 |
Warranty reserve | 2,800 | 2,300 |
Taxes | 2,272 | 2,282 |
Other | 7,839 | 8,519 |
Total accrued liabilities | $ 49,300 | $ 60,056 |
Composition of Certain Balanc_9
Composition of Certain Balance Sheet Accounts - Schedule of Other Non-Current Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Other Liabilities, Noncurrent [Abstract] | ||
Total other non-current liabilities | $ 7,731 | $ 7,611 |
Composition of Certain Balan_10
Composition of Certain Balance Sheet Accounts (Additional Information) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Net Realizable Value Inventory | $ 1.3 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 0.6 | $ 0.6 | |
Amortization expense | $ 0.6 | $ 1.9 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets, Other than Goodwill (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Intangible Assets Net Excluding Goodwill [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | $ 76,897 | $ 75,361 |
Amortized intangible assets, Accumulated Amortization | (59,356) | (58,755) |
Amortized intangible assets, Net Carrying Amount | 17,541 | 16,606 |
Total intangible assets, Gross Carrying amount | 109,180 | 107,644 |
Total intangible assets, Net Carrying Amount | 49,824 | 48,889 |
FCC Licenses [Member] | ||
Intangible Assets Net Excluding Goodwill [Line Items] | ||
Total unamortized intangible assets, Gross Carrying Amount | 32,283 | 32,283 |
Total unamortized intangible assets, Net Carrying Amount | $ 32,283 | 32,283 |
Software [Member] | ||
Intangible Assets Net Excluding Goodwill [Line Items] | ||
Weighted Average Remaining Useful Life (in years) | 6 years 6 months | |
Amortized intangible assets, Gross Carrying Amount | $ 61,468 | 59,932 |
Amortized intangible assets, Accumulated Amortization | (44,551) | (43,950) |
Amortized intangible assets, Net Carrying Amount | $ 16,917 | 15,982 |
Other Intangible Assets [Member] | ||
Intangible Assets Net Excluding Goodwill [Line Items] | ||
Weighted Average Remaining Useful Life (in years) | 8 years | |
Amortized intangible assets, Gross Carrying Amount | $ 624 | 624 |
Amortized intangible assets, Net Carrying Amount | 624 | 624 |
Service Customer Relationships [Member] | ||
Intangible Assets Net Excluding Goodwill [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | 8,081 | 8,081 |
Amortized intangible assets, Accumulated Amortization | (8,081) | (8,081) |
OEM and Dealer Relationships [Member] | ||
Intangible Assets Net Excluding Goodwill [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | 6,724 | 6,724 |
Amortized intangible assets, Accumulated Amortization | $ (6,724) | $ (6,724) |
Intangible Assets - Summary of
Intangible Assets - Summary of Amortization Expenses (Detail) $ in Thousands | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 (period from April 1 to December 31) | $ 1,918 |
2024 | 2,566 |
2025 | 2,460 |
2026 | 2,361 |
2027 | 2,141 |
Thereafter | $ 6,095 |
Long-Term Debt and Other Liab_3
Long-Term Debt and Other Liabilities - Schedule of Long-Term Debt (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Less deferred financing costs | $ (13,318) | $ (13,840) |
Less current portion of long-term debt | (7,250) | (7,250) |
Total long-term debt | 688,991 | 690,173 |
Line Of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Term Loan Facility | $ 709,559 | $ 711,263 |
Long-Term Debt and Other Liab_4
Long-Term Debt and Other Liabilities - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | ||||||||
Mar. 31, 2020 shares | Dec. 11, 2019 USD ($) shares | May 31, 2022 USD ($) shares | Apr. 30, 2022 | Apr. 30, 2021 USD ($) shares | Jan. 31, 2021 USD ($) shares | Nov. 21, 2018 USD ($) | Mar. 31, 2023 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) shares | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Amortization of deferred financing costs and interest rate caps | $ 630,000 | $ 939,000 | ||||||||
Debt instrument, maturity date | Apr. 30, 2026 | |||||||||
Prepayment Of Net Cash Proceeds Percentage | 100% | |||||||||
Prepayment Of Net Cash Proceeds Reduced Percentage | 50% | |||||||||
Prepayment Of Net Cash Proceeds Maximum Reduction Percentage | 0% | |||||||||
Prepayment Of Net Cash Proceeds Of Debt Offerings Percentage | 100% | |||||||||
Additional paid-in capital | $ 1,386,295,000 | $ 1,385,933,000 | ||||||||
Forward stock repurchase transaction shares, excluded from dilution effect | shares | 0 | 600,000 | ||||||||
Retired shares under Amended and Restated Forward Transaction | shares | 600,000 | |||||||||
Convertible Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Forward stock repurchase transaction shares, excluded from dilution effect | shares | 7,200,000 | |||||||||
Revolving Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | |||||||||
Debt instrument, maturity date | Apr. 30, 2028 | |||||||||
Margin On LIBOR | an adjusted term SOFR rate (subject to a floor of 0.00%) plus an applicable margin ranging from 3.25% to 3.75% per annum depending on GIH’s senior secured first lien net leverage ratio and a credit spread adjustment recommended by the Alternative Reference Rates Committee of 0.11%, 0.26% or 0.43% per annum based on 1-month, 3-month or 6-month term SOFR, respectively or | |||||||||
Floor rate | 0% | |||||||||
Unused Borrowing Fee Percentage | 0.25% | |||||||||
Margin fee | 3.25% | |||||||||
Revolving Credit Facility [Member] | SORF [Member] | 1-month Term [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate On Debt | 0.11% | |||||||||
Revolving Credit Facility [Member] | SORF [Member] | 3-month Term [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate On Debt | 0.26% | |||||||||
Revolving Credit Facility [Member] | SORF [Member] | 6-Month Term [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate On Debt | 0.43% | |||||||||
Revolving Credit Facility [Member] | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unused Borrowing Fee Percentage | 0.25% | |||||||||
Revolving Credit Facility [Member] | Minimum | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate On Debt | 3.25% | |||||||||
Revolving Credit Facility [Member] | Minimum | Base Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate On Debt | 2.25% | |||||||||
Revolving Credit Facility [Member] | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unused Borrowing Fee Percentage | 0.50% | |||||||||
Revolving Credit Facility [Member] | Maximum | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate On Debt | 3.75% | |||||||||
Revolving Credit Facility [Member] | Maximum | Base Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate On Debt | 2.75% | |||||||||
Term Loan and Revolving Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin On LIBOR | an adjusted term SOFR rate (subject to a floor of 0.75%) plus an applicable margin of 3.75% and a credit spread adjustment recommended by the Alternative Reference Rates Committee of 0.11%, 0.26% or 0.43% per annum based on 1-month, 3-month or 6-month term SOFR, respectively or | |||||||||
Floor rate | 0.75% | |||||||||
Term Loan and Revolving Credit Facility [Member] | SORF [Member] | 1-month Term [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate On Debt | 0.11% | |||||||||
Term Loan and Revolving Credit Facility [Member] | SORF [Member] | 2-month Term [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate On Debt | 0.26% | |||||||||
Term Loan and Revolving Credit Facility [Member] | SORF [Member] | 3-month Term [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate On Debt | 0.43% | |||||||||
Term Loan and Revolving Credit Facility [Member] | Minimum | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate On Debt | 3.75% | |||||||||
Term Loan and Revolving Credit Facility [Member] | Minimum | Base Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate On Debt | 2.75% | |||||||||
Line Of Credit [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 725,000,000 | |||||||||
Term loan discount rate | 0.50% | |||||||||
Line Of Credit [Member] | Term Loan and Revolving Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Prepayment of annual excess cash flow, Percentage | 50% | |||||||||
Reduction in Prepayment of annual excess cash flow, Percentage | 25% | |||||||||
Maximum reduction in Prepayment of annual excess cash flow, Percentage | 0% | |||||||||
Leverage ratio | 7.50 | |||||||||
Percentage Of All Commitments | 35% | |||||||||
2024 Senior Secured Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amortization of deferred financing costs and interest rate caps | $ 600,000 | $ 700,000 | ||||||||
Aggregate principal amount | 712,300,000 | 714,100,000 | ||||||||
Total debt | 709,600,000 | 711,300,000 | ||||||||
Loan origination fees | 19,700,000 | |||||||||
Debt issuance costs | 14,700,000 | 15,300,000 | ||||||||
Convertible Notes, unamortized discount | $ 2,700,000 | 2,800,000 | ||||||||
6.00% Convertible Senior Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amortization of deferred financing costs and interest rate caps | $ 300,000 | |||||||||
Interest rate | 6% | |||||||||
Debt issuance costs | $ 0 | |||||||||
Conversion of Stock, Amount Converted | $ 135,000,000 | |||||||||
Conversion of Stock, Shares Issued | shares | 24,353,006 | |||||||||
Conversion rate | 166.6667 | |||||||||
Principal amount | $ 1,000 | |||||||||
Conversion price | $ / shares | $ 6 | |||||||||
6.00% Convertible Senior Notes [Member] | Issuance Costs [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loan origination fees | $ 8,100,000 | |||||||||
6.00% Convertible Senior Notes [Member] | Institutional Buyers [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount | $ 237,800,000 | |||||||||
2022 Convertible Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount | $ 102,800,000 | |||||||||
Issuance of common stock shares | shares | 17,131,332 | |||||||||
3.75% Convertible Senior Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Forward stock repurchase transactions amount | $ 140,000,000 | $ 140,000,000 | ||||||||
Forward stock repurchase transaction shares, excluded from dilution effect | shares | 5,100,000 | 2,100,000 | 1,500,000 | |||||||
3.75% Convertible Senior Notes [Member] | Convertible Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate | 3.75% | |||||||||
Chairman and Chief Executive Officer | Thorndale Farm Private Equity Fund 2, LLC | 2022 Convertible Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount | $ 8,000,000 | |||||||||
Issuance of common stock shares | shares | 1,333,333 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
May 31, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative Instruments Gain Loss [Line Items] | |||
Notional Amounts | $ 650 | ||
Derivative, description of terms | We receive payments in the amount calculated pursuant to the caps for any period in which the three-month USD LIBOR rate increases beyond the applicable strike rate | ||
Unrealized loss on the interest rate caps net | $ 2.3 | $ 5.3 | |
Other Comprehensive Income (Loss) | |||
Derivative Instruments Gain Loss [Line Items] | |||
Fair value of outstanding derivative instruments, unrealized loss net of taxes deferred in accumulated other comprehensive income | 0 | ||
Fair value of outstanding derivative instruments, loss, expected to be reclassified to earnings | 2.2 | ||
Interest Rate Cap | |||
Derivative Instruments Gain Loss [Line Items] | |||
Notional Amounts | $ 8.6 | ||
Decrease in fair value on interest | $ 7.3 | $ 16.1 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Schedule of Notional Amounts Strike Rates and End Dates of the Cap Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | May 31, 2021 | |
Derivative [Line Items] | ||
Notional Amounts | $ 650,000 | |
0.75% due on 7/31/2023 | ||
Derivative [Line Items] | ||
Start Date | Jul. 31, 2021 | |
End Date | Jul. 31, 2023 | |
Notional Amounts | $ 650,000 | |
Strike Rate | 0.75% | |
0.75% due on 7/31/2024 | ||
Derivative [Line Items] | ||
Start Date | Jul. 31, 2023 | |
End Date | Jul. 31, 2024 | |
Notional Amounts | $ 525,000 | |
Strike Rate | 0.75% | |
1.25% due on 7/31/2025 | ||
Derivative [Line Items] | ||
Start Date | Jul. 31, 2024 | |
End Date | Jul. 31, 2025 | |
Notional Amounts | $ 350,000 | |
Strike Rate | 1.25% | |
2.25% due on 7/31/2026 | ||
Derivative [Line Items] | ||
Start Date | Jul. 31, 2025 | |
End Date | Jul. 31, 2026 | |
Notional Amounts | $ 250,000 | |
Strike Rate | 2.25% | |
2.75% due on 7/31/2027 | ||
Derivative [Line Items] | ||
Start Date | Jul. 31, 2026 | |
End Date | Jul. 31, 2027 | |
Notional Amounts | $ 200,000 | |
Strike Rate | 2.75% |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Schedule of Fair Value of Interest Rate Derivates (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Derivatives Fair Value [Line Items] | ||
Prepaid Expense and Other Assets, Current | $ 46,259 | $ 45,100 |
Other Assets, Noncurrent | 34,478 | 43,355 |
Interest Rate Cap Current | ||
Derivatives Fair Value [Line Items] | ||
Derivative Asset | 22,772 | 24,459 |
Interest Rate Cap Non Current | ||
Derivatives Fair Value [Line Items] | ||
Derivative Asset | $ 17,639 | $ 25,578 |
Prepaid Expenses and Other Current Assets | ||
Derivatives Fair Value [Line Items] | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid Expense and Other Assets, Current | Prepaid Expense and Other Assets, Current |
Other Noncurrent Assets | ||
Derivatives Fair Value [Line Items] | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Interest Costs - Summary of Int
Interest Costs - Summary of Interest Costs (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Schedule Of Interest [Line Items] | ||
Interest costs charged to expense | $ 14,497 | $ 9,827 |
Amortization of deferred financing costs | 630 | 939 |
Amortization of the purchase price of interest rate caps | 134 | 8 |
Accretion of debt discount | 108 | 115 |
Interest expense | 8,976 | 10,889 |
Total interest costs | 9,630 | 11,026 |
Software [Member] | ||
Schedule Of Interest [Line Items] | ||
Interest rate cap benefit | (157) | (97) |
Property and Equipment [Member] | ||
Schedule Of Interest [Line Items] | ||
Interest rate cap benefit | (497) | (40) |
Interest Rate Cap [Member] | ||
Schedule Of Interest [Line Items] | ||
Interest rate cap benefit | $ (6,393) | $ 0 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Leases [Abstract] | |
Lessee operating lease option to extend | 15 years |
Undiscounted minimum lease payments | $ 110,785 |
Leases - Summary of our lease e
Leases - Summary of our lease expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 3,938 | $ 3,546 |
Financing lease cost: | ||
Amortization of leased assets | 39 | 38 |
Interest on lease liabilities | 5 | 13 |
Total lease cost | $ 3,982 | $ 3,597 |
Leases - Other information rega
Leases - Other information regarding our leases (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash paid for amounts included in measurement of lease liabilities: | ||
Operating cash flows used in operating leases | $ 3,969 | $ 3,496 |
Operating cash flows used in financing leases | 5 | 13 |
Financing cash flows used in financing leases | 57 | 43 |
Non-cash items: | ||
Operating leases obtained | 718 | 2,269 |
Financing leases obtained | $ 0 | $ 0 |
Weighted average remaining lease term | ||
Operating leases | 8 years | 9 years |
Financing leases | 1 year | 1 year |
Weighted average discount rate | ||
Operating leases | 6.70% | 6.90% |
Financing leases | 16.60% | 17.90% |
Leases - Annual Future Minimum
Leases - Annual Future Minimum Obligations for Operating Leases Other than Arrangements with Commercial Airline Partners (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2023 (period from April 1 to December 31) | $ 10,877 | |
2024 | 15,256 | |
2025 | 14,402 | |
2026 | 14,229 | |
2027 | 13,377 | |
Thereafter | 42,644 | |
Lessee, Operating Lease, Liability, to be Paid, Total | 110,785 | |
Less: Amount representing interest | (24,075) | |
Present value of net minimum lease payments | 86,710 | |
Accrued liabilities | 9,445 | $ 9,094 |
Non-current operating lease liabilities | 77,265 | $ 79,241 |
Other non-current liabilities | 0 | |
Total lease liabilities | 86,710 | |
Financing Leases | ||
2023 (period from April 1 to December 31) | 79 | |
2024 | 4 | |
2025 | 2 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 0 | |
Total future minimum lease payments | 85 | |
Less: Amount representing interest | (4) | |
Present value of net minimum lease payments | 81 | |
Accrued liabilities | 76 | |
Non-current operating lease liabilities | 0 | |
Other non-current liabilities | 5 | |
Total lease liabilities | $ 81 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Derivative Litigation [Member] | |
Loss Contingencies [Line Items] | |
Litigation filing date | September 25, 2018 and September 26, 2018 |
SmartSky Litigation [Member] | |
Loss Contingencies [Line Items] | |
Litigation filing date | February 28, 2022 |
Supply and Product Support Agreement [Member] | |
Loss Contingencies [Line Items] | |
Additional Equipment with an estimated Aggregate Purchase Price | $ 102 |
Supply and Product Support Agreement [Member] | Contractual Commitments [Member] | |
Loss Contingencies [Line Items] | |
Long Term Purchase Commitment Amount | $ 170 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Summary of Fair Value and Carrying Value of Long-Term Debt (Detail) - Term Loan Facility [Member] - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of term loans | [1] | $ 708,000 | $ 708,000 |
Term loans | [2] | $ 709,559 | $ 711,263 |
[1] Fair value amounts are rounded to the nearest million. Carrying value of the Term Loan Facility reflects the unaccreted debt discount of $ 2.7 million and $ 2.8 million as of March 31, 2023 and December 31, 2022, respectively. See Note 6, “Long-Term Debt and Other Liabilities,” for further information. |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Summary of Fair Value and Carrying Value of Long-Term Debt (Parenthetical) (Detail) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Term Loan Facility [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument, Unamortized Discount | $ 2.7 | $ 2.8 |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 17.70% | 8% | |
Income tax provision (benefit) | $ (4,388) | $ (1,937) | |
Interest or penalties related to uncertain tax positions | 0 | $ 0 | |
Liabilities for interest and potential penalties | $ 0 | $ 0 | |
Federal statutory rate | 21% | 21% |
Stock-Based Compensation and _3
Stock-Based Compensation and 401(k) Plan - Additional Information (Detail) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) Plans $ / shares shares | Mar. 31, 2022 USD ($) | |
Number of share-based employee compensation plans | Plans | 3 | |
Stock options, shares granted | 0 | |
Stock options exercised | 68,520 | |
Stock options forfeited | 1,875 | |
Stock options, shares expired | 0 | |
Employee Contribution | 100% | |
Percentage of employees contribution matched by the company | 4% | |
Employer Contribution | $ | $ 0.5 | $ 0.5 |
Employee Stock Purchase Plan [Member] | ||
Common stock, shares issued under Employee Stock Purchase Plan | 12,582 | |
Restricted Stock Units (RSUs) [Member] | ||
Fair value of options granted recognized period | 4 years | |
Share units granted | 1,346,428 | |
Share units forfeited | 40,561 | |
Fair value of option granted | $ | $ 22.3 | |
Share units vested | 1,013,614 | |
Deferred Stock Units [Member] | ||
Fair value of options granted | $ / shares | $ 0.5 | |
Share units granted | 31,804 | |
Share units vested | 55,999 |
Stock-Based Compensation and _4
Stock-Based Compensation and 401(k) Plan - Summary of Stock-Based Compensation Expense by Operating Expense Excluding Discontinued Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 5,041 | $ 4,007 |
Cost of Service Revenue [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 343 | 186 |
Cost of Equipment Revenue [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 287 | 208 |
Engineering, Design and Development [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 754 | 494 |
Sales and Marketing [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 738 | 549 |
General and Administrative [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 2,919 | $ 2,570 |
Research and Development Costs
Research and Development Costs - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Research and Development [Abstract] | ||
Research and Development Expense | $ 7.9 | $ 5.4 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of changes in accumulated other comprehensive income (loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | $ (101,869) | $ (320,154) |
Other comprehensive income (loss) before reclassifications | (2,439) | 16,053 |
Net current period comprehensive income (loss) | (7,085) | 16,172 |
Ending Balance | (88,143) | (281,040) |
Accumulated Currency Translation Adjustment [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (1,225) | (960) |
Other comprehensive income (loss) before reclassifications | 75 | 111 |
Less: income realized and reclassified to earnings | 0 | 0 |
Net current period comprehensive income (loss) | 75 | 111 |
Ending Balance | (1,150) | (849) |
Accumulated Change in Fair Value Cash Flow Hedges [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | 31,353 | 2,749 |
Other comprehensive income (loss) before reclassifications | (2,439) | 16,053 |
Less: income realized and reclassified to earnings | 4,721 | (8) |
Net current period comprehensive income (loss) | (7,160) | 16,061 |
Ending Balance | 24,193 | 18,810 |
Accumulated Other Comprehensive Loss [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | 30,128 | 1,789 |
Other comprehensive income (loss) before reclassifications | (2,364) | 16,164 |
Less: income realized and reclassified to earnings | 4,721 | (8) |
Net current period comprehensive income (loss) | (7,085) | 16,172 |
Ending Balance | $ 23,043 | $ 17,961 |
Government Assistance (Addition
Government Assistance (Additional Information) (Details) $ in Millions | Jul. 15, 2022 USD ($) |
Government Assistance [Line Items] | |
Reimbursements Cost | $ 132 |
Federal Communications Commission [Member] | |
Government Assistance [Line Items] | |
Reimbursements Cost | $ 334 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Total stock-based compensation expense | $ 5,041 | $ 4,007 |
Cost of Service Revenue [Member] | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Total stock-based compensation expense | 343 | 186 |
Engineering, Design and Development [Member] | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Total stock-based compensation expense | 754 | 494 |
Sales and Marketing [Member] | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Total stock-based compensation expense | 738 | 549 |
General and Administrative [Member] | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Total stock-based compensation expense | $ 2,919 | $ 2,570 |