May 2014 Investor Presentation Exhibit 99.1 |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 2 DISCLAIMER Safe Harbor Statement This presentation contains “forward-looking statements” that are based on management’s beliefs and assumptions and on information currently available to management. Most forward-looking statements contain words that identify them as forward-looking, such as “anticipates,” “believes,” “continues,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms that relate to future events. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Gogo’s actual results, performance or achievements to be materially different from any projected results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent the beliefs and assumptions of Gogo only as of the date of this presentation and Gogo undertakes no obligation to update or revise publicly any such forward-looking statements, whether as a result of new information, future events or otherwise. As such, Gogo’s future results may vary from any expectations or goals expressed in, or implied by, the forward-looking statements included in this presentation, possibly to a material degree. Gogo cannot assure you that the assumptions made in preparing any of the forward-looking statements will prove accurate or that any long-term financial or operational goals and targets will be realized. In particular, the availability and performance of certain technology solutions yet to be implemented by the Company set forth in this presentation represent aspirational long-term goals based on current expectations. For a discussion of some of the important factors that could cause Gogo’s results to differ materially from those expressed in, or implied by, the forward-looking statements included in this presentation, investors should refer to the disclosure contained under the heading “Risk Factors” and “Special Note Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2014. Note to Certain Operating and Financial Data In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), Gogo also discloses in this presentation certain non-GAAP financial information, including Adjusted EBITDA and Cash CapEx. These financial measures are not recognized measures under GAAP and are not intended to be, and should not be, considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. In addition, this presentation contains various customer metrics and operating data, including numbers of aircraft or units online, that are based on internal company data, as well as information relating to the commercial and business aviation market, and our position within those markets. While management believes such information and data are reliable, they have not been verified by an independent source and there are inherent challenges and limitations involved in compiling data across various geographies and from various sources. |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 3 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 3 BUSINESS OVERVIEW |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 4 WHY INVEST IN GOGO Gogo is a leading aircraft communications service provider for the global aviation industry. Our scale position supports superior unit economics, operational excellence, and industry-leading R&D investments. Gogo is a pure play. We are the only telecom company that focuses solely on the unique requirements of connecting aircraft. Our growth opportunity is large, well-defined and early stage. |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 5 • > 2,050 aircraft online • > 8,000 daily flights • ~77% market share (1) • > 55 million passenger sessions since service launch • Awards for 332 aircraft: - Delta international - Japan Airlines - AeroMexico • Near global satellite network COMMERCIAL AVIATION NORTH AMERICA BUSINESS AVIATION GLOBAL • > 7,500 systems operating • > 2,250 ATG aircraft, 94% online market share (2) • > 5,250 satellite aircraft, 63% online market share (2) GOGO LEADERSHIP SPANS ALL MARKET SEGMENTS COMMERCIAL AVIATION REST OF WORLD (1) Commercial Aviation market share is based on management estimates, trade publications and other public sources as of 3/31/2014. (2) Business Aviation Satellite and ATG market share is based on management estimates as of 3/31/2014. |
ONLY GOGO PROVIDES COMPLETE END-TO-END SOLUTIONS AIRCRAFT OPERATIONS REGULATORY APPROVAL NETWORK & BANDWIDTH MANAGEMENT CUSTOMER CARE & MARKETING SUPPORT NETWORK ENGINEERING & DESIGN AIRCRAFT CONNECTIVITY SOLUTIONS ENGINEERING COMPLETE BACK-OFFICE INFRASTRUCTURE AND SUPPORT AIRLINE CONNECTIVITY PRODUCTS & SERVICES DEVELOPMENT 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 6 |
GOGOAIR.COM | 7 GOGOAIR.COM | 7 OUR VERSATILE, PROPRIETARY PLATFORM ENGAGES EVERY PASSENGER, AIRCRAFT OWNER & OPERATOR Gogo Vision Gogo Signature Services Operations-Oriented Communication Services Gogo Connectivity & Gogo Biz AIRCRAFT OWNERS & OPERATORS PASSENGERS, AIRLINES & MEDIA PARTNERS PASSENGERS Gogo Text & Talk 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. |
WE PRIDE OURSELVES ON OUR ENDURING PARTNERSHIPS (1) (1) Letter of Intent (1) 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. International North America Original Equipment Manufacturers Fractional Jet Operators COMMERCIAL AVIATION BUSINESS AVIATION GOGOAIR.COM | 8 Subsidiary of |
STRONG INCUMBENT POSITION COMMERCIAL AVIATION NORTH AMERICA BROADBAND AIRCRAFT ONLINE (1) BUSINESS AVIATION NORTH AMERICA BROADBAND AIRCRAFT ONLINE (1) GOGO HAS 10X MORE BROADBAND AIRCRAFT THAN THE CLOSEST COMPETITOR 1 Based on management estimates, trade publications and other public sources as of 3/31/2014. (77%) 133 (94%) 2,250 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 9 2,056 435 38 148 Gogo Global Eagle (Row 44) Panasonic LiveTV Gogo All Others |
ATTACKING A LARGE AND EXPANDING GLOBAL OPPORTUNITY BUSINESS AIRCRAFT (2) North America Rest of World COMMERCIAL AIRCRAFT (1) 2.1x 1.4x 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 10 Sources: (1) Derived from Boeing Current Market Outlook 2013 – 2032, excludes: cargo aircraft, RJs < than 50 seats. CA-NA wide-body aircraft are included as part of CA-ROW market. (2) JetNet iQ Report Q4 2013; General Aviation Manufacturers Association 2012 Statistical Databook. NA includes jets and turbo props, ROW excludes turbo props. |
BROADEST ARRAY OF CONNECTIVITY SOLUTIONS Technology Region Peak Speed Key Attributes Iridium Global 2.4 Kbps - Primarily telecom service - Low data speeds - Satellite SwiftBroadband Global 432 Kbps - Low data speeds - Satellite Air-to-Ground (EvDo Rev A) Regional 3.1 Mbps - Overnight install - Suits all aircraft types Air-to-Ground 4 (EvDo Rev B) Regional 9.8 Mbps -Triples the peak speed - More reliable than ATG - Overnight install Ku Band Global 50 Mbps - Global coverage - Multiple suppliers - Available today Ka Band Global 50 Mbps - High data speeds - Spot beam - Next Generation Expected 2015 Launch Expected 2015 Launch (Regional) (Regional) Ground-to-Orbit (Hybrid) Regional 70 Mbps+ - More spectrally efficient - Lower profile - More robust & reliable Expected 2014 Launch 2Ku Global 70 Mbps+ - More spectrally efficient - Lower profile - More robust & reliable Expected 2015 Launch 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 11 |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 12 AIRCRAFT TIMES REVENUE PER AIRCRAFT YESTERDAY TODAY TOMORROW INCREASE AIRCRAFT INCREASE REVENUE PER AIRCRAFT North America Business Passengers In-Flight Connectivity Global All Passengers Media Partners Aircraft Operators In-Flight Connectivity Gogo Vision Gogo Text Messaging Gogo Signature Services Gogo Operations-Oriented Communications Services |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 13 SCALE AND EXPERTISE HIGH GROWTH SIGNIFICANT OPERATING LEVERAGE • Strong contribution margins • Highly scalable operating infrastructure • New product offerings expected to generate solid returns • Transition to cash capex-lite model • Strong revenue growth and multiple growth drivers • Growing percentage of high margin service revenue • Riding the mobile internet wave • 10x the number of connected aircraft as the closest competitor • Enables significant investment in technology • Drives operational, technology & regulatory expertise • Generates unrivalled track record of reliability COMPELLING BUSINESS MODEL |
FINANCIAL REVIEW 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 14 |
GROWING REVENUE DRIVES PROFITABILITY ADJUSTED EBITDA ($MM) REVENUE ($MM) 73% CAGR $353 $49 $24 CA-ROW Segment Loss ($89) ($45) ($1) $41 $52 $9 $14 $8 Note: Minor differences exist due to rounding. $328 $11 $63 $234 $160 $95 $37 2009 2010 2011 2012 2013 2014 Q1 LTM 2009 2010 2011 2012 2013 2014 Q1 LTM 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 15 |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 16 MORE AIRCRAFT & MORE REVENUE PER AIRCRAFT IN CA-NA REVENUE ($MM) 106% CAGR AIRCRAFT ONLINE (1) ~ 3x Increase ARPA (000s) 4.2x Increase (1) End of period. Annualized Average Revenue per Aircraft 692 1,811 2,032 2,056 2009 2012 2013 2014 Q1 $24 $84 $101 $110 2009 2012 2013 2014 Q1 $11 $134 $199 $213 2009 2012 2013 2014 Q1 LTM |
STRONG Q1 2014 FINANCIAL RESULTS DEMONSTRATE SCALEABILITY REVENUE ($MM) +35% SEGMENT PROFIT ($MM) $96 $71 2013 Q1 2014 Q1 Note: Minor differences exist due to rounding. ($0.4) ($6) ($17) $6 $9 $5 $3 $16 CA-NA BA CA-ROW CA-NA BA CA-ROW Total 2013 Q1 2014 Q1 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 17 $43 $57 $26 $39 |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 18 HIGH-MARGIN SERVICE REVENUE DRIVES BA PROFITABILITY AND CASH FLOW ATG AIRCRAFT ONLINE (1) SEGMENT PROFIT ($MM) 72% CAGR 103% CAGR SERVICE REVENUE ($MM) ~42x increase (1) End of period. 49 1,455 2,047 2,250 2009 2012 2013 2014 Q1 $6 $34 $52 $57 2009 2012 2013 2014 Q1 LTM $3 $36 $51 $58 2009 2012 2013 2014 Q1 LTM |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 19 INVESTING FOR A DECADE+ OF GROWTH REVENUE ($MM) 73% CAGR ENGINEERING, DESIGN & DEVELOPMENT ($MM) AS % OF REVENUE GENERAL & ADMINISTRATIVE ($MM) SALES & MARKETING ($MM) $37 $328 2009 2012 2013 $234 $23 $35 $50 2009 2012 2013 $28 $49 $69 2009 2012 2013 $28 $26 $31 2009 2012 2013 62% 15% 15% 2009 2012 2013 77% 21% 21% 2009 2012 2013 75% 11% 9% 2009 2012 2013 |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 20 EVOLVING CAPEX MODEL (1) Cash CAPEX represents capital expenditures net of airborne equipment proceeds received from the airlines. Gross CapEx Cash CapEx (1) CAPITAL EXPENDITURES ($MM) $77 $77 $79 $121 $124 $58 $104 $106 2009 2012 2013 2014 Q1 LTM N E T W O R K I N S T A L L GOGO RENTS GOGO PAYS AIRLINE PAYS GOGO BUILDS TRANSITION |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 21 WHY INVEST IN GOGO Gogo is a leading aircraft communications service provider for the global aviation industry. Our scale position supports superior unit economics, operational excellence, and industry-leading R&D investments. Gogo is a pure play. We are the only telecom company that focuses solely on the unique requirements of connecting aircraft. Our growth opportunity is large, well-defined and early stage. |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 22 2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 22 APPENDIX |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 23 RECONCILIATION OF CASH CAPEX ($MM) 2009 2010 2011 2012 2013 2014 Q1 Purchases of Property and Equipment (69) (33) (33) (67) (105) (32) Acquisition of Intangible Assets (Capitalized Software) (8) (7) (10) (12) (16) (4) Gross CapEx (77) (40) (43) (79) (121) (36) Change in Deferred Airborne Lease Incentives – 9 11 18 9 5 Amortization of Deferred Airborne Lease Incentives – 1 1 4 8 3 Cash CapEx (77) (30) (31) (58) (104) (29) Note: Minor differences exist due to rounding |
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 24 RECONCILIATION OF ADJUSTED EBITDA ($MM) 2009 2010 2011 2012 2013 2014 Q1 Net Income (142) (140) (18) (96) (146) (17) Interest Income (0) (0) (0) (0) (0) (0) Interest Expense 30 – 1 9 29 7 Income Tax Provision – 3 1 1 1 0 Depreciation & Amortization 22 31 33 37 56 16 EBITDA (91) (106) 16 (49) (60) 6 Fair Value Derivative Adjustments – 33 (59) (10) 36 - Class A and Class B Senior Convertible Preferred Stock Return – 18 31 52 29 - Accretion of Preferred Stock – 9 10 10 5 - Stock-based Compensation Expense 1 2 2 4 6 2 Loss on Extinguishment of Debt 2 – – – – - Write Off of Deferred Equity Financing Costs – – – 5 – - Amortization of Deferred Airborne Lease Incentives – (1) (1) (4) (8) (3) Adjusted EBITDA (89) (45) (1) 9 8 5 Note: Minor differences exist due to rounding |