June 30, 2015 Investor Presentation Exhibit 99.1 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. SAFE HARBOR STATEMENT This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are based on management’s beliefs and assumptions and on information currently available to 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 headings “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2015. 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 when analyzing our performance or liquidity, as applicable, investors should (i) use Adjusted EBITDA in addition to, and not as an alternative to, net loss attributable to common stock as a measure of operating results, and (ii) use Cash CAPEX in addition to, and not as an alternative to, consolidated capital expenditures when evaluating our liquidity. 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. GOGOAIR.COM | 2 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. GOGO’S MISSION Advance aviation by connecting every aircraft with the most trusted communications services on and above our planet |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. WHY INVEST IN GOGO LARGE GROWTH OPPORTUNITY LARGE GROWTH OPPORTUNITY HIGH BARRIERS TO ENTRY HIGH BARRIERS TO ENTRY EXPERIENCE & SCALE EXPERIENCE & SCALE LEADING POSITION LEADING POSITION ATTRACTIVE ECONOMICS ATTRACTIVE ECONOMICS GOGOAIR.COM | 4 |
MARKET & COMPANY OVERVIEW |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. AVIATION INTERNET TRENDS 1 2 3 4 5 Connected aircraft transform global aviation – the last frontier of internet connectivity Cost, coverage, capacity and reliability are just now reaching critical inflection points Next gen technologies expected to increase speeds from 10 to 100Mbps within 5 years with a comparable reduction in costs More bandwidth drives demand from business traveler connectivity today to every person and most ‘things’ on aircraft in 10 years Airlines will demand ‘Always Available Everywhere for Every Plane’ GOGOAIR.COM | 6 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. Better passenger experience - less cost A TRANSFORMATIVE OPPORTUNITY FOR AIRLINES Benefits Airline differentiation Direct revenue opportunities Operational efficiency Enhanced safety Enabling the Connected Aircraft GOGOAIR.COM | 7 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. BEYOND PASSENGER CONNECTIVITY – ENABLING THE AVIATION ECOSYSTEM GOGOAIR.COM | 8 Inflight Services Flight Operations Aircraft Systems Maintenance Data |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. CA - North America (“CA-NA”) 1.4x 1.2x CA - Rest of World (“CA-ROW”) 2.3x (1) Source: Boeing Current Market Outlook 2014 – 2033, excludes: cargo aircraft. (2) Source: JetNet iQ Report Q4 2014; General Aviation Manufacturers Association 2014 Statistical Databook, excludes Rest of World turbo props. ADDRESSABLE CONNECTED AIRCRAFT ADDRESSABLE CONNECTED AIRCRAFT Commercial Aviation (“CA”) Commercial Aviation (“CA”) Business Aviation (“BA”) Business Aviation (“BA”) 2.6x size of CA-NA 2.6x size of CA-NA A LARGE AND GROWING GLOBAL CONNECTED AVIATION MARKET The connected aircraft industry is worth up to $30 billion The connected aircraft industry is worth up to $30 billion 5,300 7,300 2013 2033F 13,900 32,000 2013 2033F 30,300 37,800 2014 2024F (1) (2) GOGOAIR.COM | 9 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. Largest Market Share in CA-NA Largest Market Share in CA-NA GOGO’S IMPRESSIVE SCALE AND REACH Largest Market Share in BA Largest Market Share in BA 68% of connected aircraft Note: Data based on management estimates, trade publications and other public sources as of 3/31/2015 (1) Based on management estimates as of 3/31/2015 (2) Includes Gogo awarded aircraft as of 6/22/2015 #1 Global in-flight connectivity provider Leader in North America and expanding internationally #1 Global in-flight connectivity provider Leader in North America and expanding internationally (1) (1) Untapped CA-ROW market Untapped CA-ROW market Awarded Aircraft (2) GOGOAIR.COM | 10 Quickly expanding internationally 88% of broadband aircraft (1) |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. LONG-TERM PARTNERSHIPS WITH OUR MAJOR AVIATION PARTNERS North America North America Original Equipment Manufacturers Original Equipment Manufacturers Fractional Jet Operators Fractional Jet Operators Commercial Aviation Commercial Aviation Business Aviation Business Aviation International International GOGOAIR.COM | 11 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. STRONG EXECUTION $37 $408 2009 2014 Total Revenue ($MM) $(89) $11 $78 2009 2014 Adjusted EBITDA CA-ROW Segment Loss $89 Adjusted EBITDA (1) ($MM) 62% CAGR (1) Please see reconciliation of Adjusted EBITDA in appendix. GOGOAIR.COM | 12 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. WHY WE WIN Specialize in aviation and telecom Specialize in aviation and telecom Global networks with excellent reliability Global networks with excellent reliability Superior technology & economics Superior technology & economics End-to-end service provider End-to-end service provider 1 2 3 4 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. ATG / ATG-4 1 st generation of technology North America coverage 2Ku 2 nd generation of technology Global coverage Intellectual Property 100+ patents globally WE SPECIALIZE IN AIRCRAFT AND HAVE A TRACK RECORD OF INNOVATION EXPERTISE IN INTERNET, AVIATION AND TELECOM EXPERTISE IN INTERNET, AVIATION AND TELECOM GOGOAIR.COM | 14 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. GOGO’S TECHNOLOGY AGAIN DISRUPTS THE GLOBAL AVIATION INDUSTRY ATG-4: North America coverage 2Ku: Global coverage ATG-4 Antenna 2Ku Antenna Expected launch 2015 70 Mbps at launch, 100 Mbps expected when spot beam Ku- band satellites are launched Low cost – estimated half the bandwidth cost compared to other satellite solutions Most complete global coverage Half the height of traditional antenna – lower drag, fuel savings Leverages Gogo’s existing Ku-band network and future high throughput Ku satellites ATG launched 2008 ATG-4 launched 2012 ATG / ATG-4 peak speed – 3 Mbps / 10Mbps Proprietary solution enabling overnight installs Years of experience delivering broadband service Gogo is the only ATG solution provider GOGOAIR.COM | 15 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. GLOBAL AND REGIONAL NETWORKS DRIVE SUPERIOR RELIABILITY AND RAPID INNOVATION Scalable and modular architecture Operational leverage Rapid innovation and evolution Reliable and mature hardware and software platform Superior reliability 98%+ ATG system availability 75+ million of passenger sessions 7,800+ flight per day GOGOAIR.COM | 16 Figures as of 3/31/2015. |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. THE MOST COMPLETE END-TO-END AVIATION SERVICE PROVIDER Real-time credit card processing Real-time weather information Other applications to enhance airlines operational efficiency Account support Network monitoring and management Passenger support services, portal design, developing and hosting Airborne equipment for ATG and satellite Certification, installation, maintenance, etc. Passenger connectivity Passenger entertainment Portal content ATG / ATG-4 for North America 2Ku / Ku for global satellite service Passenger Services Equipment and Equipment Related Services Airline / Owner / Operator Services Operations-Oriented Communications Services Global Network Solutions GOGOAIR.COM | 17 |
FINANCIALS |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. GROWING REVENUE DRIVES PROFITABILITY Note: Minor differences exist due to rounding (1) Please see reconciliation of Adjusted EBITDA in appendix Adjusted EBITDA (1) ($MM) $37 $160 $328 $408 $428 2009 2011 2013 2014 Q1 2015 LTM ($89) ($1) $8 $11 $14 $41 $78 $80 2009 2011 2013 2014 Q1 2015 LTM $49 CA-ROW Segment Loss Revenue ($MM) 62% CAGR $89 Adjusted EBITDA $93 GOGOAIR.COM | 19 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. CA - NA: REVENUE AND SEGMENT PROFIT GROWTH Note: Minor differences exist due to rounding (1) We define ARPA as the aggregate service revenue for the annual period divided by the number of aircraft online during that period $11 $251 $266 2009 2014 Q1 2015 LTM Revenue ($MM) $24 $121 $127 2009 2014 Q1 2015 LTM Annualized ARPA (1) ($000s) $(91) $26 $30 2009 2014 Q1 2015 LTM Segment Profit ($MM) 11% Margin 692 2,098 2,200 2009 2014 Q1 2015 Aircraft Online (End of Period) 102 Q/Q Increase GOGOAIR.COM | 20 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. $6 $72 $78 $20 $84 $81 2009 2014 Q1 2015 LTM BA: HIGH-MARGIN SERVICE REVENUE DRIVES PROFITABILITY AND CASH FLOW $26 $156 $159 Equipment Revenue Service Revenue Revenue ($MM) $3 $63 $63 11% 40% 40% 2009 2014 Q1 2015 LTM Segment Profit ($MM) Segment Profit Margin Segment Profit 49 2,797 2,983 2009 2014 Q1 2015 ATG Aircraft Online (End of Period) 186 Q/Q Increase 139 943 936 2009 2014 Q1 2015 LTM ATG Units Shipped Note: Minor differences exist due to rounding. 43% CAGR GOGOAIR.COM | 21 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. 1 85 116 180 257 293 500+ 2012 2013 2014 Aircraft Online (end of period) Cumulative Aircraft Awards June 2015 116 aircraft online as of 3/31/2015 Near global Ku-band satellite network 2Ku technology selected by 7 airlines for trial or adoption (1) Includes Gogo awarded aircraft as of 6/22/2015 $14 $41 $78 $80 2012 2013 2014 Q1 2015 LTM International Aircraft Awards and Aircraft Online Executing Our International Expansion CA-ROW Segment Loss ($MM) International Partners CA - ROW: FOCUS ON INTERNATIONAL EXPANSION (1) GOGOAIR.COM | 22 Q1 ‘15 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. CAPEX PROFILE (1) Please see reconciliation of Cash CapEx in the Appendix Gross CapEx Capitalized software Airborne equipment Network equipment Over the past two years, Gogo’s Cash CapEx has been stable at ~$100 million Over the past two years, Gogo’s Cash CapEx has been stable at ~$100 million Equipment proceeds received from airlines and landlord incentives Cash CapEx (1) GOGOAIR.COM | 23 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. Why Does Gogo Win? Why Does Gogo Win? Specialize in aviation and telecom Specialize in aviation and telecom End-to-end service provider End-to-end service provider Superior technology and cost Superior technology and cost Deliver excellent reliability Deliver excellent reliability Focused Strategy Focused Strategy Gain global share Gain global share Grow ARPA Grow ARPA Increase bandwidth to aircraft Increase bandwidth to aircraft Deliver consistent execution Deliver consistent execution GOGO - A COMPELLING INVESTMENT OPPORTUNITY Gogo is a leading aero communications service provider for the global aviation industry GOGOAIR.COM | 24 |
Q&A |
APPENDIX |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. 1991 GOGO - LEADER WITH ESTABLISHED TRACK RECORD 2012 2013 2014 June 2013 Gogo IPO October 2013 Gogo launches Gogo Text & Talk, ATG 2000, Gogo Vision, and UCS 5000 for Business Aviation Gogo awarded domestic fleet of Japan Airlines August 2008 Connectivity service is launched on American Airlines Delta Air Lines selects Gogo for IFC June 2009 Gogo begins offering ATG service to Business Aviation customers Q1 2012 Gogo initiates international expansion efforts April 2014 Gogo announces its new global 2Ku in-flight connectivity technology Fall 2012 Gogo begins rollout of ATG-4 technology December 2014 Gogo awarded 250 American Airlines regional jets June 2012 Gogo wins Delta’s international fleet October 2014 United Airlines announces it selects Gogo for regional jets July 2014 Gogo launches satellite service on Delta Air Lines and Japan Airlines 2006 Gogo wins bid for 3MHz ATG spectrum 2008 Gogo completes initial build-out of ATG network in record time 2009 2015 February 2015 Delta Air Lines selects 2Ku for more than 250 aircraft March 2015 Gogo issues $362M Senior Unsecured Convertible Notes June 2015 Brazilian airline GOL selects 2Ku to service entire fleet of aircraft 2006 1991 Founder Jimmy Ray envisions a telephone system for aircraft GOGOAIR.COM | 27 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. ADJUSTED EBITDA RECONCILIATION ($MM) 2009 2010 2011 2012 2013 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 Net Income (142) (140) (18) (96) (146) (17) (19) (25) (24) (20) Interest Income (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) Interest Expense 30 – 1 9 29 7 7 9 9 10 Income Tax Provision – 3 1 1 1 – – – – – Depreciation & Amortization 22 31 33 37 56 16 15 17 17 19 EBITDA (91) (106) 16 (49) (60) 6 4 2 2 9 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 2 3 3 3 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) (3) (4) (4) (4) Adjusted EBITDA (89) (45) (1) 9 8 5 3 1 1 8 Note: Minor differences exist due to rounding GOGOAIR.COM | 28 |
©2015 Gogo Inc. and Affiliates. Proprietary & Confidential. CASH CAPEX RECONCILIATION ($MM) 2009 2010 2011 2012 2013 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 Purchases of Property and Equipment (69) (33) (33) (67) (105) (32) (28) (35) (37) (53) Acquisition of Intangible Assets (Capitalized Software) (8) (7) (10) (12) (16) (4) (5) (5) (3) (4) Consolidated Capital Expenditures (77) (40) (43) (79) (121) (36) (33) (41) (40) (57) Change in Deferred Airborne Lease Incentives – 9 11 18 9 5 3 5 17 9 Amortization of Deferred Airborne Lease Incentives – 1 1 4 8 3 3 3 4 4 Landlord Incentives – – – – – – – 2 7 12 Cash CapEx (77) (30) (31) (58) (104) (29) (27) (30) (12) (32) Note: Minor differences exist due to rounding GOGOAIR.COM | 29 |