Gogo Inc. - FORM 8-K - EX-99.2

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EX-99.1 - EX-99.1 - Gogo Inc.	d67236dex991.htm
8-K - FORM 8-K - Gogo Inc.	d67236d8k.htm

2nd Quarter 2015

Earnings Results

Michael Small –

Chief Executive Officer

Norman Smagley –

Chief Financial Officer

August 6, 2015

Exhibit 99.2

SAFE HARBOR STATEMENT

Safe Harbor Statement

This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act

of 1934 that are based on management’s beliefs and assumptions and on information currently available to 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

achievements

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

realized.

particular,

the

availability

and

performance

certain

technology

solutions

yet

implemented

the

Company

set

forth

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

addition

disclosing

financial

results

that

are

determined

accordance

with

U.S.

generally

accepted

accounting

principles

(“GAAP”),

Gogo

also

discloses

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

liquidity,

applicable,

investors

should

(i)

use

Adjusted

EBITDA

addition

to,

and

not

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.

addition,

this

presentation

contains

various

customer

metrics

and

operating

data,

including

numbers

aircraft

units

online,

that

are

based

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

independent

source

and

there

are

inherent

challenges

and

limitations

involved

compiling

data

across various geographies and from various sources.

EXECUTING ON OUR GLOBAL OPPORTUNITY

Connected aircraft

70%+ win rate since 2Ku announcement

It is real

It is big

It is underway

Flying on over 50% of connected commercial aircraft

worldwide

Note: Based on management estimates as of 6/30/2015

GOGO

LEADS THE INDUSTRY

Innovative platforms & services

Most connected aircraft

Best network solutions

WINNING AIRCRAFT

Signed definitive agreement with GOL

Large full fleet award of 140 aircraft

500+ 2Ku aircraft awarded since April 2014

Demonstrates importance of 2Ku in the tropical region

GOL selected three products:

in-flight connectivity,

wireless in-flight entertainment,

and Gogo’s

newest product: Gogo

ADDING MORE BANDWIDTH

2Ku commercial launch is expected by year-end 2015

2Ku brings more capacity to North America

2Ku wins on cost, coverage, capacity and reliability

HITTING OUR NUMBERS

Revenue up 22% to $121 million

Adjusted EBITDA up 248% to $10.8 million

CA-NA + BA combined segment profit up 31% to $29 million

Q2 2015 Strong Financial Results:

HITTING OUR NUMBERS

Added nearly 300 aircraft online in CA & BA

CA added ~120 aircraft with Gogo

Vision

BA shipped 227 ATG units

Segmentation strategy gains traction

Average of more than 3 per day

Q2 2015 Strong Operating Performance:

KEY PRIORITIES

Bring 2Ku online

Increase bandwidth to unlock ARPA

Increase scale advantage

Q2 2015 RECORD REVENUE & ADJUSTED EBITDA

$79

$82

$90

$95

$101

$20

$22

$20

Q2 '14

Q3 '14

Q4 '14

Q1 '15

Q2 '15

Total Revenue ($MM)

Service Revenue

Equipment Revenue

22%

Y/Y Growth

•

Q2 2015 record revenue quarter

•

Service revenue exceeds

$100 million, up 28% y/y

•

CA-NA + BA segment profit up

31% y/y to $29 million

•

Q2 2015 record Adjusted EBITDA

of $10.8 million, 9% margin

$100

$121

$109

$104

$116

Note: Minor differences exist due to rounding

CA-NA STRONG REVENUE & ARPA GROWTH

$62

$68

$72

$75

Q2 '14

Q3 '14

Q4 '14

Q1 '15

Q2 '15

Service Revenue ($MM)

22%

Y/Y Growth

•

Service revenue driven by:

13% y/y growth in ARPA

9% y/y growth in aircraft online

•

ARPA

growth continues:

Changes in pricing

Growth in Gogo

Vision revenue

Regional jet additions impact ARPA

$115

$122

$121

$127

$14

Q2 '14

Q3 '14

Q4 '14

Q1 '15

Q2 '15

Annualized ARPA

Connectivity Revenue

Other Service Revenue

13%

Y/Y Growth

Note: Minor differences exist due to rounding

(1)Other service revenue includes content filtering, VoIP access for airlines’ flight crews, portal development services, operations-oriented

communications services, third-party advertising, e-commerce revenue share arrangements and partner co-branding and reseller arrangements.

$120

$122

$131

$134

$136

(1)

CA-NA AIRCRAFT ONLINE

& SEGMENT PROFIT GROWTH

Y/Y Growth

Note: Minor differences exist due to rounding

•

105 aircraft installed

•

56 aircraft retired by airlines

•

Strong operating leverage

continues

•

Segment profit margin

expands to 15%

Q2 '14

Q3 '14

Q4 '14

Q1 '15

Q2 '15

Aircraft Online

(End of Period)

2,249

2,200

2,098

2,044

2,058

BA SERVICE REVENUE

& ATG AIRCRAFT ONLINE GROWTH

•

Service revenue increased

39% y/y to record $24 million

•

Service revenue continues

strong growth track record

•

Total revenue reaches new

record

$17

$19

$20

$22

$24

$20

$21

$19

$20

Q2 '14

Q3 '14

Q4 '14

Q1 '15

Q2 '15

Total Revenue ($MM)

Service Revenue

Equipment Revenue

17%

Y/Y Growth

$37

$43

$40

$42

Note: Minor differences exist due to rounding

BA REVENUE & SEGMENT PROFIT GROWTH

•

ATG

aircraft online increased

31% y/y to nearly 3,200

•

ATG

service ARPU

of $2,200+

per month

•

Q2 2015 segment profit up

13% y/y, 41% margin

2,415

2,637

2,797

2,983

3,170

Q2 '14

Q3 '14

Q4 '14

Q1 '15

Q2 '15

ATG Aircraft Online

(End of Period)

31%

Y/Y Growth

$19

$23

$18

Q2 '14

Q3 '14

Q4 '14

Q1 '15

Q2 '15

CA-ROW Segment Loss ($MM)

FOCUS ON INTERNATIONAL EXPANSION

116

148

Q2 '14

Q3 '14

Q4 '14

Q1 '15

Q2 '15

Satellite Aircraft Online

(End of Period)

28%

Q/Q Growth

•

Installed 32 Ku-based aircraft

•

Revenue of $2.3 million, up from

$0.3 million in Q2’14

•

Y/Y decrease in segment loss due

to lower cost of service

CONSOLIDATED CASH CAPEX & CASH BALANCE

$27

$30

$12

$32

$23

Q2 '14

Q3 '14

Q4 '14

Q1 '15

Q2 '15

Cash CapEx ($MM)

•

Q2 ’15 Y/Y changes in capital

expenditures:

Increased airborne equipment proceeds

Decreased

ATG

network

spend

•

Strong cash position

$196

$243

$211

$400

$392

Q2 '14

Q3 '14

Q4 '14

Q1 '15

Q2 '15

Cash Balance ($MM)

Y/Y Decrease

$4MM

Note: Minor differences exist due to rounding. Cash balance is end of period.

2015 GUIDANCE

Revenue

$485 -

$505 million

CA-NA

$300 -

$320 million

$170 -

$180 million

CA-ROW

$10 -

$15 million

Adjusted EBITDA at higher end of $15 -

$25 million

Cash CAPEX

$100 -

$120 million

STRONG Q2 FINANCIAL PERFORMANCE

Strong service revenue growth

Strong operating leverage

Growth in profitability

Q&A

****

************************************

********************************

Appendix

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******************

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***

ADJUSTED EBITDA RECONCILIATION ($MM)

2009

2010

2011

2012

2013

2014

2015

Net

Income

(142)

(140)

(18)

(96)

(146)

(17)

(19)

(25)

(24)

(20)

(25)

Interest Income

(0)

Interest

Expense

–

Income Tax Provision

–

Depreciation

& Amortization

EBITDA

(91)

(106)

(49)

(60)

Fair Value Derivative

Adjustments

–

(59)

(10)

–

Class

A and Class B Senior

Convertible Preferred Stock

Return

–

Accretion of Preferred Stock

–

Stock-based

Compensation

Expense

Loss on Extinguishment of

Debt

–

Write Off of Deferred Equity

Financing Costs

–

Amortization of Deferred

Airborne Lease Incentives

–

(1)

(4)

(8)

(3)

(4)

(5)

Adjusted EBITDA

(89)

(45)

(1)

Note: Minor differences exist due to rounding

CASH CAPEX RECONCILIATION ($MM)

2009

2010

2011

2012

2013

2014

2015

Purchases of

Property and

Equipment

(69)

(33)

(67)

(105)

(32)

(28)

(35)

(37)

(53)

(33)

Acquisition

Intangible Assets

(Capitalized

Software)

(8)

(7)

(10)

(12)

(16)

(4)

(5)

(3)

(4)

Consolidated

Capital

Expenditures

(77)

(40)

(43)

(79)

(121)

(36)

(33)

(41)

(40)

(57)

(37)

Change in

Deferred Airborne

Lease Incentives

–

Amortization of

Deferred Airborne

Lease Incentives

–

Landlord

Incentives

–

Cash CapEx

(77)

(30)

(31)

(58)

(104)

(29)

(27)

(30)

(12)

(32)

(23)

Note: Minor differences exist due to rounding

Gogo Inc. - FORM 8-K - EX-99.2 - August 6, 2015

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