8-K
0001537054false00015370542022-08-052022-08-050001537054us-gaap:CommonStockMember2022-08-052022-08-050001537054gogo:PreferredStockPurchaseRightsMember2022-08-052022-08-05

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 5, 2022

GOGO INC.
(Exact name of registrant as specified in its charter)

Delaware

 

001-35975

 

27-1650905

(State or other jurisdiction of incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No.)

 

105 Edgeview Dr., Suite 300
Broomfield, CO

 

 

80021

(Address of principal executive offices)

 

(Zip Code)


Registrant's telephone number, including area code:

303-301-3271

 

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Class

Trading Symbol

Name of Each Exchange on Which Registered

Common stock, par value $0.0001 per share

GOGO

NASDAQ Global Select Market

Preferred Stock Purchase Rights

GOGO

NASDAQ Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 


 

Item 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On August 5, 2022, Gogo Inc. issued a press release announcing its results of operations for the second quarter ended June 30, 2022. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

Exhibit No.

 

Description

99.1

 

Press Release dated August 5, 2022.

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

GOGO INC.

 

 

 

By: /s/ Barry Rowan

Barry Rowan
Executive Vice President and

Chief Financial Officer

 

Date: August 5, 2022

 

 


EX-99.1

Exhibit 99.1

 

 

Investor Relations Contact:

Media Relations Contact:

Will Davis

Dave Mellin

+1 917-519-6994

+1 303-301-3606

wdavis@gogoair.com

pr@gogoair.com

 

 

Gogo Announces Record Results and Updates 2022 Guidance

 

Second Quarter Revenue of $97.8 million, up 19% Year-over-Year; Net Income from Continuing Operations of $22.0 million; and Adjusted EBITDA(1) of $41.2 million, up 12% Year-over-Year

 

BROOMFIELD, CO - August 5, 2022 – Gogo Inc. (NASDAQ: GOGO) (“Gogo” or the “Company”), the world’s largest provider of broadband connectivity services for the business aviation market, today announced its financial results for the quarter ended June 30, 2022.

 

Q2 2022 Highlights

Gogo announced its plans to launch the first low earth orbit (“LEO”)-based global broadband service in business aviation (“Global Broadband”) using an electronically steered antenna designed with Hughes Network Systems and a LEO satellite network operated by OneWeb.
Record total revenue of $97.8 million increased 19% compared to Q2 2021 fueled by strong growth in both service and equipment revenue.
o
Record service revenue of $73.1 million increased 13% compared to Q2 2021 and 3% compared to Q1 2022.
o
Equipment revenue of $24.8 million increased 41% compared to Q2 2021 and 12% compared to Q1 2022.
Total ATG aircraft online (“AOL”) reached 6,654, an increase of 10% compared to Q2 2021 and 2% compared to Q1 2022.
o
Total AVANCE units online grew to 2,893, an increase of 40% compared to Q2 2021 and 7% compared to Q1 2022. AVANCE units comprised more than 43% of total AOL as of June 30, 2022, up from 34% as of June 30, 2021.
Average Monthly Revenue per ATG aircraft online (“ARPU”) of $3,328 increased 1% compared to Q2 2021 and was flat versus Q1 2022.
Net income from continuing operations increased to $22.0 million compared to a net loss from continuing operations of $66.4 million in Q2 2021, primarily due to a loss on extinguishment of debt and settlement of convertible notes of $79.6 million recorded in Q2 2021.
o
Basic earnings per share from continuing operations in Q2 2022 was $0.18. Diluted earnings per share from continuing operations was $0.17.
Adjusted EBITDA(1) of $41.2 million, which includes $1.2 million of expenses related to Global Broadband, increased 12% compared to Q2 2021 and decreased 4% compared to Q1 2022.
Cash provided by operating activities from continuing operations of $26.4 million in Q2 2022 increased from cash used in operating activities of $15.0 million in the prior year period primarily due to the timing of interest payments.
o
Free Cash Flow(1) was $15.5 million compared with negative $24.7 million in the prior year period due to the timing of interest payments partially offset by an increase in capital expenditures primarily tied to Gogo 5G.
o
Cash and cash equivalents totaled $164.0 million as of June 30, 2022 compared to $152.8 million as of March 31, 2022.

1

 


 

 

 

“Customer excitement is growing as we prepare for the launch of Gogo 5G, which will provide a 5-10x bandwidth improvement for current Gogo customers,” said Oakleigh Thorne, Chairman and CEO. “With the announcement of our Global Broadband initiative, we continue to leverage our AVANCE platform to provide an easy upgrade path for aircraft of all sizes to further boost performance and expand our addressable market.”

 

“The strength of the BA market combined with solid execution drove record performance in the quarter, positioning us well for continuing revenue and Free Cash Flow growth,” said Barry Rowan, Gogo’s Executive Vice President and CFO. “Based on our continuing strong performance we are raising several key elements of our guidance, including 2022 revenue; 2022 Adjusted EBITDA at the high end of our range in spite of $9 million in strategic investments and litigation expenses; and our long-term revenue growth rate, based on the contribution from our Global Broadband initiative.”

 

Updated 2022 Financial Guidance

 

The Company updates its guidance for 2022 as follows:

Total revenue at the high end of the previously guided range of $390 million to $400 million.
Adjusted EBITDA(1) at the high end of the previously guided range of $150 million to $160 million, which includes a combined $9 million of estimated litigation expenses and estimated operating expenses for Global Broadband, which were not reflected in the initial 2022 guidance range.
Free Cash Flow(1) of $35 million to $45 million, which includes capital expenditures of approximately $65 million of which approximately $50 million are tied to Gogo 5G (no change to prior guidance).

 

(1)
See “Non-GAAP Financial Measures” below.

 

 

Updated Long-Term Financial Targets

 

The Company updates its long-term targets as follows:

Revenue growth at a compound annual growth rate of approximately 17% from 2021 through 2026, with Global Broadband contributing to revenue beginning in 2025 (versus prior target of approximately 15% which excluded Global Broadband).
Annual Adjusted EBITDA Margin(1) approaching 50% in 2026, up from the low 40%'s in 2022 and 2023 (no change to prior target).
Free Cash Flow(1) of approximately $110 million in 2023, reflecting $10 million of operating expenses tied to Global Broadband, and an aggregate $5 million of additional interest expense and legal expenses tied to the SmartSky litigation that were not included in the previously announced Free Cash Flow target of $125 million. The Company reiterates its target for Free Cash Flow of over $200 million beginning in 2025.

 

Free Cash Flow and Adjusted EBITDA in 2022 and 2023 do not reflect the potential impact of Gogo 5G timing.

 

The Company’s 2022 financial guidance and long-term targets include Global Broadband but do not reflect the impact of other new strategic investments or the Federal Communications Commission’s Secure and Trusted Communications Networks Reimbursement Program, as the Company awaits further information regarding whether Congress will appropriate additional funds for eligible expenditures under the Program.

 

Conference Call

 

2

 


 

The Company will host its second quarter conference call on August 5, 2022 at 9:30 a.m. ET. A live webcast of the conference call, as well as a replay, will be available online on the Investor Relations section of the Company’s investor website at http://ir.gogoair.com.

 

Participants can also join the call by dialing +1 844-543-0451 (within the United States and Canada). Please click on the below link to retrieve your unique conference ID to use to access the earnings call:

 

https://register.vevent.com/register/BI17160ac541d64e8a9a122b802daa77b8

 

Non-GAAP Financial Measures

 

We report certain non-GAAP financial measurements, including Adjusted EBITDA and Free Cash Flow, in the supplemental tables below, and we refer to Adjusted EBITDA Margin in our discussion of long-term baseline targets above. Management uses Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow for business planning purposes, including managing our business against internally projected results of operations and measuring our performance and liquidity. These supplemental performance measures also provide another basis for comparing period-to-period results by excluding potential differences caused by non-operational and unusual or non-recurring items. These supplemental performance measurements may vary from and may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow are not recognized measurements under accounting principles generally accepted in the United States, or GAAP; when analyzing our performance with Adjusted EBITDA or Adjusted EBITDA Margin or liquidity with Free Cash Flow, as applicable, investors should (i) evaluate each adjustment in our reconciliation to the corresponding GAAP measure, and the explanatory footnotes regarding those adjustments, (ii) use Adjusted EBITDA and Adjusted EBITDA Margin in addition to, and not as an alternative to, net income (loss) attributable to common stock as a measure of operating results, and (iii) use Free Cash Flow in addition to, and not as an alternative to, consolidated net cash provided by (used in) operating activities when evaluating our liquidity. No reconciliation of the forecasted range for Adjusted EBITDA for fiscal 2022, Adjusted EBITDA Margin for fiscal 2022, 2023 and 2026 and Free Cash Flow for fiscal 2023 and 2025 is included in this release because we are unable to quantify certain amounts that would be required to be included in the corresponding GAAP measure without unreasonable efforts and we believe such reconciliation would imply a degree of precision that would be confusing or misleading to investors.

 

Cautionary Note Regarding Forward-Looking Statements

Certain disclosures in this press release and related comments by our management include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding our business outlook, industry, business strategy, plans, goals and expectations concerning our market position, international expansion, future technologies, future operations, margins, profitability, future efficiencies, capital expenditures, liquidity and capital resources and other financial and operating information. When used in this discussion, the words “anticipate,” “assume,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this press release. Forward-looking statements are based on our current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although we believe the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, the following: our ability to attract and retain customers and generate revenue from the provision of our connectivity and entertainment services; our reliance on our key OEMs and dealers for equipment sales; our ability to develop and deploy Gogo 5G and Global Broadband; the impact of competition; the impact of the COVID-19 pandemic and the measures implemented to combat it; global supply chain and logistics issues and the possible impact of inflation; our ability to evaluate or pursue strategic opportunities; our reliance on third parties for equipment and services; our ability to recruit, train and retain highly skilled employees; the impact of adverse economic conditions; our ability to maintain our rights to use our licensed 3 Mhz of ATG spectrum in the United States and obtain rights to additional spectrum if needed; the impact of our use of open source software; the impact of equipment failures or material software defects; the impact of service disruptions caused by, among other things, force majeure events, cyber attacks or other malicious activities; the impact of assertions by third parties of infringement, misappropriation or other violations; our ability to innovate and provide products and services; the impact of government regulation of the internet and

3

 


 

conflict minerals; our possession and use of personal information; the extent of expenses, liabilities or business disruption resulting from litigation; our ability to protect our intellectual property rights; our substantial indebtedness, limitations and restrictions in the agreements governing our current and future indebtedness and our ability to service our indebtedness; fluctuations in our operating results; our ability to fully utilize portions of our deferred tax assets; and other events beyond our control that may result in unexpected adverse operating results.

 

Additional information concerning these and other factors can be found under the caption “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2021 as filed with the Securities and Exchange Commission (the “SEC”) on March 3, 2022 and in our quarterly reports on Form 10-Q as filed with the SEC on May 5, 2022 and August 5, 2022.

 

Any one of these factors or a combination of these factors could materially affect our financial condition or future results of operations and could influence whether any forward-looking statements contained in this report ultimately prove to be accurate. Our forward-looking statements are not guarantees of future performance, and you should not place undue reliance on them. All forward-looking statements speak only as of the date made and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 

About Gogo

Gogo is the world’s largest provider of broadband connectivity services for the business aviation market. We offer a customizable suite of smart cabin systems for highly integrated connectivity, inflight entertainment and voice solutions. Gogo’s products and services are installed on thousands of business aircraft of all sizes and mission types from turboprops to the largest global jets, and are utilized by the largest fractional ownership operators, charter operators, corporate flight departments and individuals.

 

As of June 30, 2022, Gogo reported 2,893 business aircraft flying with Gogo’s AVANCE L5 or L3 system installed, 6,654 aircraft flying with its ATG systems onboard, and 4,462 aircraft with narrowband satellite connectivity installed. Connect with us at business.gogoair.com.

 

4

 


 

Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Service revenue

 

$

73,064

 

 

$

64,767

 

 

$

143,731

 

 

$

124,122

 

Equipment revenue

 

 

24,772

 

 

 

17,608

 

 

 

46,855

 

 

 

32,122

 

Total revenue

 

 

97,836

 

 

 

82,375

 

 

 

190,586

 

 

 

156,244

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of service revenue (exclusive of items shown below)

 

 

15,752

 

 

 

15,177

 

 

 

30,386

 

 

 

29,272

 

Cost of equipment revenue (exclusive of items shown below)

 

 

16,868

 

 

 

10,932

 

 

 

31,149

 

 

 

19,214

 

Engineering, design and development

 

 

7,952

 

 

 

6,541

 

 

 

13,358

 

 

 

12,034

 

Sales and marketing

 

 

6,068

 

 

 

4,826

 

 

 

12,299

 

 

 

8,555

 

General and administrative

 

 

15,357

 

 

 

11,746

 

 

 

28,815

 

 

 

22,119

 

Depreciation and amortization

 

 

3,499

 

 

 

3,547

 

 

 

7,290

 

 

 

7,664

 

Total operating expenses

 

 

65,496

 

 

 

52,769

 

 

 

123,297

 

 

 

98,858

 

Operating income

 

 

32,340

 

 

 

29,606

 

 

 

67,289

 

 

 

57,386

 

Other (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(194

)

 

 

(54

)

 

 

(241

)

 

 

(111

)

Interest expense

 

 

9,772

 

 

 

16,340

 

 

 

20,661

 

 

 

45,634

 

Loss on extinguishment of debt and settlement of convertible notes

 

 

 

 

 

79,564

 

 

 

 

 

 

83,961

 

Other expense (income), net

 

 

43

 

 

 

(127

)

 

 

17

 

 

 

(132

)

Total other expense

 

 

9,621

 

 

 

95,723

 

 

 

20,437

 

 

 

129,352

 

Income (loss) from continuing operations before income taxes

 

 

22,719

 

 

 

(66,117

)

 

 

46,852

 

 

 

(71,966

)

Income tax provision

 

 

702

 

 

 

277

 

 

 

2,639

 

 

 

312

 

Net income (loss) from continuing operations

 

 

22,017

 

 

 

(66,394

)

 

 

44,213

 

 

 

(72,278

)

Net loss from discontinued operations, net of tax

 

 

 

 

 

(2,854

)

 

 

 

 

 

(4,655

)

Net income (loss)

 

$

22,017

 

 

$

(69,248

)

 

$

44,213

 

 

$

(76,933

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stock per share - basic:

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.18

 

 

$

(0.61

)

 

$

0.38

 

 

$

(0.74

)

Discontinued operations

 

 

 

 

 

(0.02

)

 

 

 

 

 

(0.05

)

Net income (loss) attributable to common stock per share - basic

 

$

0.18

 

 

$

(0.63

)

 

$

0.38

 

 

$

(0.79

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stock per share - diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.17

 

 

$

(0.61

)

 

$

0.35

 

 

$

(0.74

)

Discontinued operations

 

 

 

 

 

(0.02

)

 

 

 

 

 

(0.05

)

Net income (loss) attributable to common stock per share - diluted

 

$

0.17

 

 

$

(0.63

)

 

$

0.35

 

 

$

(0.79

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

123,252

 

 

 

109,060

 

 

 

117,375

 

 

 

96,884

 

Diluted

 

 

134,718

 

 

 

109,060

 

 

 

134,474

 

 

 

96,884

 

 

 

5

 


 

Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

163,993

 

 

$

145,913

 

Accounts receivable, net of allowances of $1,311 and $894, respectively

 

 

44,570

 

 

 

37,730

 

Inventories

 

 

42,543

 

 

 

33,976

 

Prepaid expenses and other current assets

 

 

48,895

 

 

 

32,295

 

Total current assets

 

 

300,001

 

 

 

249,914

 

Non-current assets:

 

 

 

 

 

 

Property and equipment, net

 

 

84,586

 

 

 

63,672

 

Intangible assets, net

 

 

48,842

 

 

 

49,554

 

Operating lease right-of-use assets

 

 

72,384

 

 

 

70,989

 

Other non-current assets, net of allowances of $524 and $455, respectively

 

 

41,980

 

 

 

28,425

 

Deferred income taxes

 

 

175,773

 

 

 

185,133

 

Total non-current assets

 

 

423,565

 

 

 

397,773

 

Total assets

 

$

723,566

 

 

$

647,687

 

Liabilities and stockholders’ deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

20,662

 

 

$

17,203

 

Accrued liabilities

 

 

62,254

 

 

 

59,868

 

Deferred revenue

 

 

1,507

 

 

 

1,825

 

Current portion of long-term debt

 

 

7,250

 

 

 

109,620

 

Total current liabilities

 

 

91,673

 

 

 

188,516

 

Non-current liabilities:

 

 

 

 

 

 

Long-term debt

 

 

692,482

 

 

 

694,760

 

Non-current operating lease liabilities

 

 

77,744

 

 

 

77,329

 

Other non-current liabilities

 

 

7,293

 

 

 

7,236

 

Total non-current liabilities

 

 

777,519

 

 

 

779,325

 

Total liabilities

 

 

869,192

 

 

 

967,841

 

Stockholders’ deficit

 

 

 

 

 

 

Common stock

 

 

13

 

 

 

11

 

Additional paid-in capital

 

 

1,379,356

 

 

 

1,258,477

 

Accumulated other comprehensive income

 

 

22,420

 

 

 

1,789

 

Treasury stock, at cost

 

 

(140,000

)

 

 

(128,803

)

Accumulated deficit

 

 

(1,407,415

)

 

 

(1,451,628

)

Total stockholders’ deficit

 

 

(145,626

)

 

 

(320,154

)

Total liabilities and stockholders’ deficit

 

$

723,566

 

 

$

647,687

 

 

 

6

 


 

Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

For the Six Months
Ended June 30,

 

 

 

2022

 

 

2021

 

Operating activities from continuing operations:

 

 

 

 

 

 

Net income (loss)

 

$

44,213

 

 

$

(72,278

)

Adjustments to reconcile net income (loss) to cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

7,290

 

 

 

7,664

 

Loss (gain) on asset disposals, abandonments and write-downs

 

 

114

 

 

 

(2

)

Provision for expected credit losses

 

 

498

 

 

 

(15

)

Deferred income taxes

 

 

2,540

 

 

 

90

 

Stock-based compensation expense

 

 

9,411

 

 

 

4,741

 

Amortization of deferred financing costs and interest rate caps

 

 

1,777

 

 

 

2,781

 

Accretion of debt discount

 

 

231

 

 

 

188

 

Loss on extinguishment of debt and settlement of convertible notes

 

 

 

 

 

83,961

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(7,270

)

 

 

871

 

Inventories

 

 

(8,567

)

 

 

692

 

Prepaid expenses and other current assets

 

 

(79

)

 

 

(2,238

)

Contract assets

 

 

(2,748

)

 

 

(3,314

)

Accounts payable

 

 

858

 

 

 

3,349

 

Accrued liabilities

 

 

(2,043

)

 

 

(6,483

)

Deferred revenue

 

 

(318

)

 

 

(632

)

Accrued interest

 

 

(164

)

 

 

(8,576

)

Other non-current assets and liabilities

 

 

(1,503

)

 

 

(1,198

)

Net cash provided by operating activities from continuing operations

 

 

44,240

 

 

 

9,601

 

Investing activities from continuing operations:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(17,481

)

 

 

(1,284

)

Acquisition of intangible assets—capitalized software

 

 

(2,469

)

 

 

(542

)

Purchase of interest rate cap

 

 

 

 

 

(8,629

)

Net cash used in investing activities from continuing operations

 

 

(19,950

)

 

 

(10,455

)

Financing activities from continuing operations:

 

 

 

 

 

 

Redemption of senior secured notes

 

 

 

 

 

(1,023,146

)

Proceeds from term loan, net of discount

 

 

 

 

 

721,375

 

Payments on term loan

 

 

(3,625

)

 

 

 

Payment of debt issuance costs

 

 

 

 

 

(20,251

)

Payments on financing leases

 

 

(103

)

 

 

(154

)

Stock-based compensation activity

 

 

(2,515

)

 

 

(2,752

)

Net cash used in financing activities from continuing operations

 

 

(6,243

)

 

 

(324,928

)

Cash flows from discontinued operations:

 

 

 

 

 

 

Cash used in operating activities

 

 

 

 

 

(800

)

Cash used in investing activities

 

 

 

 

 

 

Cash used in financing activities

 

 

 

 

 

 

Net cash used in discontinued operations

 

 

 

 

 

(800

)

Effect of exchange rate changes on cash

 

 

8

 

 

 

(89

)

Increase (decrease) in cash, cash equivalents and restricted cash

 

 

18,055

 

 

 

(326,671

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

146,268

 

 

 

435,870

 

Cash, cash equivalents and restricted cash at end of period

 

$

164,323

 

 

$

109,199

 

Cash, cash equivalents and restricted cash at end of period

 

$

164,323

 

 

$

109,199

 

Less: current restricted cash

 

 

 

 

 

25

 

Less: non-current restricted cash

 

 

330

 

 

 

 

Cash and cash equivalents at end of period

 

$

163,993

 

 

$

109,174

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

Cash paid for interest

 

$

19,680

 

 

$

51,259

 

Cash paid for taxes

 

$

112

 

 

$

276

 

Non-cash investing activities:

 

 

 

 

 

 

Purchases of property and equipment in current liabilities

 

$

13,089

 

 

$

97

 

 

7

 


 

Gogo Inc. and Subsidiaries

Supplemental Information – Key Operating Metrics

 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Aircraft online (at period end)

 

 

 

 

 

 

 

 

 

 

 

 

ATG

 

 

6,654

 

 

 

6,036

 

 

 

6,654

 

 

 

6,036

 

Satellite

 

 

4,462

 

 

 

4,587

 

 

 

4,462

 

 

 

4,587

 

Average monthly connectivity service revenue per aircraft online

 

 

 

 

 

 

 

 

 

 

 

 

ATG

 

$

3,328

 

 

$

3,296

 

 

$

3,324

 

 

$

3,192

 

Satellite

 

 

257

 

 

 

249

 

 

 

246

 

 

 

244

 

Units sold

 

 

 

 

 

 

 

 

 

 

 

 

ATG

 

 

310

 

 

 

182

 

 

 

556

 

 

 

317

 

Satellite

 

 

32

 

 

 

67

 

 

 

101

 

 

 

147

 

Average equipment revenue per unit sold (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

ATG

 

$

67

 

 

$

76

 

 

$

70

 

 

$

77

 

Satellite

 

 

73

 

 

 

42

 

 

 

55

 

 

 

44

 

 

ATG aircraft online. We define ATG aircraft online as the total number of business aircraft for which we provide ATG services as of the last day of each period presented. This number excludes aircraft receiving ATG service as part of the ATG Network Sharing Agreement with Intelsat.
Satellite aircraft online. We define satellite aircraft online as the total number of business aircraft for which we provide narrowband satellite services as of the last day of each period presented.
Average monthly connectivity service revenue per ATG aircraft online. We define average monthly connectivity service revenue per ATG aircraft online as the aggregate ATG connectivity service revenue for the period divided by the number of months in the period, divided by the number of ATG aircraft online during the period (expressed as an average of the month end figures for each month in such period). Revenue share earned from the ATG Network Sharing Agreement with Intelsat is excluded from this calculation.
Average monthly connectivity service revenue per satellite aircraft online. We define average monthly connectivity service revenue per satellite aircraft online as the aggregate narrowband satellite connectivity service revenue for the period divided by the number of months in the period, divided by the number of narrowband satellite aircraft online during the period (expressed as an average of the month end figures for each month in such period).
Units sold. We define units sold as the number of ATG or narrowband satellite units for which we recognized revenue during the period.
Average equipment revenue per ATG unit sold. We define average equipment revenue per ATG unit sold as the aggregate equipment revenue from all ATG units sold during the period, divided by the number of ATG units sold.
Average equipment revenue per satellite unit sold. We define average equipment revenue per satellite unit sold as the aggregate equipment revenue earned from all narrowband satellite units sold during the period, divided by the number of narrowband satellite units sold.

 

Gogo Inc. and Subsidiaries

Supplemental Information – Revenue and Cost of Revenue

(in thousands, unaudited)

 

 

For the Three Months
Ended June 30,

 

 

% Change

 

 

For the Six Months
Ended June 30,

 

 

% Change

 

 

 

2022

 

 

2021

 

 

2022 over 2021

 

 

2022

 

 

2021

 

 

2022 over 2021

 

Service revenue

 

$

73,064

 

 

$

64,767

 

 

 

12.8

%

 

$

143,731

 

 

$

124,122

 

 

 

15.8

%

Equipment revenue

 

 

24,772

 

 

 

17,608

 

 

 

40.7

%

 

 

46,855

 

 

 

32,122

 

 

 

45.9

%

Total revenue

 

$

97,836

 

 

$

82,375

 

 

 

18.8

%

 

$

190,586

 

 

$

156,244

 

 

 

22.0

%

 

 

 

For the Three Months
Ended June 30,

 

 

% Change

 

 

For the Six Months
Ended June 30,

 

 

% Change

 

 

 

2022

 

 

2021

 

 

2022 over 2021

 

 

2022

 

 

2021

 

 

2022 over 2021

 

Cost of service revenue (1)

 

$

15,752

 

 

$

15,177

 

 

 

3.8

%

 

$

30,386

 

 

$

29,272

 

 

 

3.8

%

Cost of equipment revenue (1)

 

$

16,868

 

 

$

10,932

 

 

 

54.3

%

 

$

31,149

 

 

$

19,214

 

 

 

62.1

%

 

(1)
Excludes depreciation and amortization expense.

 

 

8

 


 

Gogo Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

(in thousands, unaudited)

 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

 

For the Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2022

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stock (GAAP)

 

$

22,017

 

 

$

(69,248

)

 

$

44,213

 

 

$

(76,933

)

 

$

22,196

 

Interest expense

 

 

9,772

 

 

 

16,340

 

 

 

20,661

 

 

 

45,634

 

 

 

10,889

 

Interest income

 

 

(194

)

 

 

(54

)

 

 

(241

)

 

 

(111

)

 

 

(47

)

Income tax provision

 

 

702

 

 

 

277

 

 

 

2,639

 

 

 

312

 

 

 

1,937

 

Depreciation and amortization

 

 

3,499

 

 

 

3,547

 

 

 

7,290

 

 

 

7,664

 

 

 

3,791

 

EBITDA

 

 

35,796

 

 

 

(49,138

)

 

 

74,562

 

 

 

(23,434

)

 

 

38,766

 

Stock-based compensation expense

 

 

5,404

 

 

 

2,892

 

 

 

9,411

 

 

 

4,741

 

 

 

4,007

 

Loss from discontinued operations

 

 

 

 

 

2,854

 

 

 

 

 

 

4,655

 

 

 

 

Loss on extinguishment of debt and settlement of convertible notes

 

 

 

 

 

79,564

 

 

 

 

 

 

83,961

 

 

 

 

Separation costs related to CA sale

 

 

 

 

 

575

 

 

 

 

 

 

720

 

 

 

 

Adjusted EBITDA

 

$

41,200

 

 

$

36,747

 

 

$

83,973

 

 

$

70,643

 

 

$

42,773

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free Cash Flow: