8-K
false000153705400015370542022-11-032022-11-030001537054gogo:PreferredStockPurchaseRightsMember2022-11-032022-11-030001537054us-gaap:CommonStockMember2022-11-032022-11-03

 

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): November 3, 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 November 3, 2022, Gogo Inc. issued a press release announcing its results of operations for the third quarter ended September 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 November 3, 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: November 3, 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 Third Quarter Results and Raises 2022 Guidance

 

Third Quarter Revenue of $105.3 million, up 21% Year-over-Year; Net Income from Continuing Operations of $20.2 million; and Adjusted EBITDA(1) of $43.7 million, up 7% Year-over-Year

 

BROOMFIELD, CO - November 3, 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 September 30, 2022.

 

Q3 2022 Highlights

Record total revenue of $105.3 million increased 21% compared to Q3 2021, fueled by strong growth in both service and equipment revenue.
o
Record service revenue of $75.3 million increased 14% compared to Q3 2021 and 3% compared to Q2 2022.
o
Record equipment revenue of $30.1 million increased 43% compared to Q3 2021 and 21% compared to Q2 2022.
AVANCE equipment units shipped totaled 388, an increase of 47% compared to Q3 2021 and 25% compared to the previous quarterly record set in Q2 2022.
Total ATG aircraft online (“AOL”) reached 6,777, an increase of 10% compared to Q3 2021 and 2% compared to Q2 2022.
o
Total AVANCE units online grew to 3,079, an increase of 38% compared to Q3 2021 and 6% compared to Q2 2022. AVANCE units comprised more than 45% of total AOL as of September 30, 2022, up from 36% as of September 30, 2021.
Average Monthly Revenue per ATG aircraft online (“ARPU”) of $3,376 increased 3% compared to Q3 2021 and 1.4% compared to Q2 2022.
Net income from continuing operations increased to $20.2 million from $19.7 million in Q3 2021. Q3 2022 net income is net of an $8 million income tax provision compared to a $0.1 million income tax provision in Q3 2021.
o
Diluted earnings per share from continuing operations was $0.15 compared to $0.16 in Q3 2021, driven primarily by the final settlement of the Company's 2022 Convertible Notes in Q2 2022.
Record Adjusted EBITDA(1) of $43.7 million, which includes $1.8 million of expenses related to Global Broadband, increased 7% compared to Q3 2021 and 6% compared to Q2 2022.
Cash provided by operating activities from continuing operations of $27.7 million in Q3 2022 increased from $26.8 million in the prior year period.
o
Free Cash Flow(1) was $8.5 million compared with $24.6 million in the prior year period, driven by an increase in capital expenditures tied to Gogo 5G.
o
Cash and cash equivalents totaled $152.2 million as of September 30, 2022 compared to $164.0 million as of June 30, 2022. Cash and cash equivalents as of September 30, 2022 reflect the Company’s September repurchase of 1.5 million shares of common stock for $18.4 million in a private transaction.

1

 


 

 

“Gogo’s record AVANCE equipment shipments in the third quarter underscore our ability to execute in a robust, underpenetrated Business Aviation market,” said Oakleigh Thorne, Chairman and CEO. “Looking ahead, the roll-out of commercial Gogo 5G services and our LEO-based Global Broadband offering will continue to elevate our performance and expand our addressable market.”

 

“Gogo’s strong third quarter operating results drove increases in our 2022 financial guidance for revenue, Adjusted EBITDA and Free Cash Flow,” said Barry Rowan, Executive Vice President and CFO. “We reiterate our long-term financial targets for 17% revenue growth for 2021 through 2026 and over $200 million in Free Cash Flow beginning in 2025.”

 

Updated 2022 Financial Guidance and Long-Term Financial Targets

 

The Company updates its guidance for 2022 as follows:

Total revenue of $395 million to $405 million versus prior guidance at the high end of the range of $390 million to $400 million.
Adjusted EBITDA(1) of $165 million to $170 million versus prior guidance at the high end of the range of $150 million to $160 million, which reflects a $5 million reduction in operating expenses resulting from the previously announced delay in the commercial launch of Gogo 5G and includes a combined $6 million of estimated litigation expenses and estimated operating expenses for Global Broadband that were not included in our original 2022 guidance.
Free Cash Flow(1) of $50 million to $60 million versus prior guidance of $35 million to $45 million, due primarily to a $10 million reduction in 5G spending. Free Cash Flow guidance now includes capital expenditures of approximately $55 million, of which $40 million is tied to Gogo 5G, versus prior capital expenditure guidance of approximately $65 million, with $50 million tied to Gogo 5G.
The Company expects that aggregate Free Cash Flow for 2022 and 2023 will be roughly equivalent to the range of $145 million to $155 million provided by the Company on August 5, 2022. Free Cash Flow for 2023 will be impacted by, among other things, the Gogo 5G delay and potentially by the Federal Communications Commission’s Secure and Trusted Communications Networks Reimbursement Program (the “FCC Program”).

 

The Company reiterates its long-term financial targets for Revenue growth, annual Adjusted EBITDA Margin, and Free Cash Flow beginning in 2025, 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.
Annual Adjusted EBITDA Margin(1) approaching 50% in 2026, up from the low 40%'s in 2022 and 2023.
Free Cash Flow of over $200 million beginning in 2025.

 

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 FCC Program, as the Company awaits further information regarding whether Congress will appropriate additional funds for eligible expenditures under the FCC Program. We plan to provide updated 2023 and long-term guidance on our fourth quarter earnings call.

 

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

 

Conference Call

 

2

 


 

The Company will host its third quarter conference call on November 3, 2022 at 8:30 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/BI4e33e92731104f91ba75eb7fcb838e8d

 

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 amounts of 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 current and potential future competition; the impact of the COVID-19 pandemic and the measures implemented to combat it; global supply chain and logistics issues and the 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, cyberattacks or other malicious activities; the impact of assertions by third parties of infringement, misappropriation or other violations; our ability to innovate and provide

3

 


 

products and services; the impact of government regulation of the internet and conflict minerals; our possession and use of personal information; the extent of expenses, liabilities or business disruptions 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, August 5, 2022 and November 3, 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.

 

 

4

 


 

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 September 30, 2022, Gogo reported 3,079 business aircraft flying with Gogo’s AVANCE L5 or L3 system installed, 6,777 aircraft flying with its ATG systems onboard, and 4,484 aircraft with narrowband satellite connectivity installed. Connect with us at business.gogoair.com.

 

5

 


 

Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

 

 

For the Three Months
Ended September 30,

 

 

For the Nine Months
Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Service revenue

 

$

75,252

 

 

$

66,204

 

 

$

218,983

 

 

$

190,326

 

Equipment revenue

 

 

30,066

 

 

 

20,968

 

 

 

76,921

 

 

 

53,090

 

Total revenue

 

 

105,318

 

 

 

87,172

 

 

 

295,904

 

 

 

243,416

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of service revenue (exclusive of amounts shown below)

 

 

17,297

 

 

 

12,985

 

 

 

47,683

 

 

 

42,257

 

Cost of equipment revenue (exclusive of amounts shown below)

 

 

19,261

 

 

 

12,368

 

 

 

50,410

 

 

 

31,582

 

Engineering, design and development

 

 

7,988

 

 

 

5,958

 

 

 

21,346

 

 

 

17,992

 

Sales and marketing

 

 

6,240

 

 

 

5,538

 

 

 

18,539

 

 

 

14,093

 

General and administrative

 

 

15,474

 

 

 

15,250

 

 

 

44,289

 

 

 

37,369

 

Depreciation and amortization

 

 

2,716

 

 

 

4,160

 

 

 

10,006

 

 

 

11,824

 

Total operating expenses

 

 

68,976

 

 

 

56,259

 

 

 

192,273

 

 

 

155,117

 

Operating income

 

 

36,342

 

 

 

30,913

 

 

 

103,631

 

 

 

88,299

 

Other (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(690

)

 

 

(34

)

 

 

(931

)

 

 

(145

)

Interest expense

 

 

8,781

 

 

 

10,943

 

 

 

29,442

 

 

 

56,577

 

Loss on extinguishment of debt and settlement of convertible notes

 

 

 

 

 

 

 

 

 

 

 

83,961

 

Other expense, net

 

 

95

 

 

 

143

 

 

 

112

 

 

 

11

 

Total other expense

 

 

8,186

 

 

 

11,052

 

 

 

28,623

 

 

 

140,404

 

Income (loss) from continuing operations before income taxes

 

 

28,156

 

 

 

19,861

 

 

 

75,008

 

 

 

(52,105

)

Income tax provision

 

 

7,980

 

 

 

131

 

 

 

10,619

 

 

 

443

 

Net income (loss) from continuing operations

 

 

20,176

 

 

 

19,730

 

 

 

64,389

 

 

 

(52,548

)

Net loss from discontinued operations, net of tax

 

 

 

 

 

(8,771

)

 

 

 

 

 

(13,426

)

Net income (loss)

 

$

20,176

 

 

$

10,959

 

 

$

64,389

 

 

$

(65,974

)

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.16

 

 

$

0.18

 

 

$

0.53

 

 

$

(0.52

)

Discontinued operations

 

 

 

 

 

(0.08

)

 

 

 

 

 

(0.13

)

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

 

$

0.16

 

 

$

0.10

 

 

$

0.53

 

 

$

(0.65

)

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.15

 

 

$

0.16

 

 

$

0.50

 

 

$

(0.52

)

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.13

)

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

 

$

0.15

 

 

$

0.16

 

 

$

0.50

 

 

$

(0.65

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

129,914

 

 

 

109,345

 

 

 

121,762

 

 

 

101,189

 

Diluted

 

 

134,221

 

 

 

133,160

 

 

 

134,454

 

 

 

101,189

 

 

 

 

6

 


 

Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

152,161

 

 

$

145,913

 

Accounts receivable, net of allowances of $1,634 and $894, respectively

 

 

49,234

 

 

 

37,730

 

Inventories

 

 

46,598

 

 

 

33,976

 

Prepaid expenses and other current assets

 

 

42,415

 

 

 

32,295

 

Total current assets

 

 

290,408

 

 

 

249,914

 

Non-current assets:

 

 

 

 

 

 

Property and equipment, net

 

 

98,688

 

 

 

63,672

 

Intangible assets, net

 

 

50,220

 

 

 

49,554

 

Operating lease right-of-use assets

 

 

75,694

 

 

 

70,989

 

Other non-current assets, net of allowances of $526 and $455, respectively

 

 

49,505

 

 

 

28,425

 

Deferred income taxes

 

 

164,124

 

 

 

185,133

 

Total non-current assets

 

 

438,231

 

 

 

397,773

 

Total assets

 

$

728,639

 

 

$

647,687

 

Liabilities and stockholders’ deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

18,413

 

 

$

17,203

 

Accrued liabilities

 

 

50,677

 

 

 

59,868

 

Deferred revenue

 

 

1,604

 

 

 

1,825

 

Current portion of long-term debt

 

 

7,250

 

 

 

109,620

 

Total current liabilities

 

 

77,944

 

 

 

188,516

 

Non-current liabilities:

 

 

 

 

 

 

Long-term debt

 

 

691,337

 

 

 

694,760

 

Non-current operating lease liabilities

 

 

80,123

 

 

 

77,329

 

Other non-current liabilities

 

 

7,523

 

 

 

7,236

 

Total non-current liabilities

 

 

778,983

 

 

 

779,325

 

Total liabilities

 

 

856,927

 

 

 

967,841

 

Stockholders’ deficit

 

 

 

 

 

 

Common stock

 

 

13

 

 

 

11

 

Additional paid-in capital

 

 

1,383,858

 

 

 

1,258,477

 

Accumulated other comprehensive income

 

 

33,455

 

 

 

1,789

 

Treasury stock, at cost

 

 

(158,375

)

 

 

(128,803

)

Accumulated deficit

 

 

(1,387,239

)

 

 

(1,451,628

)

Total stockholders’ deficit

 

 

(128,288

)

 

 

(320,154

)

Total liabilities and stockholders’ deficit

 

$

728,639

 

 

$

647,687

 

 

 

7

 


 

Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

For the Nine Months
Ended September 30,

 

 

 

2022

 

 

2021

 

Operating activities from continuing operations:

 

 

 

 

 

 

Net income (loss)

 

$

64,389

 

 

$

(52,548

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

10,006

 

 

 

11,824

 

Loss on asset disposals, abandonments and write-downs

 

 

166

 

 

 

121

 

Provision for expected credit losses

 

 

855

 

 

 

55

 

Deferred income taxes

 

 

10,470

 

 

 

147

 

Stock-based compensation expense

 

 

14,101

 

 

 

10,144

 

Amortization of deferred financing costs and interest rate caps

 

 

2,486

 

 

 

3,718

 

Accretion of debt discount

 

 

345

 

 

 

303

 

Loss on extinguishment of debt and settlement of convertible notes

 

 

 

 

 

83,961

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(12,289

)

 

 

(520

)

Inventories

 

 

(12,622

)

 

 

(1,850

)

Prepaid expenses and other current assets

 

 

12,862

 

 

 

(26,794

)

Contract assets

 

 

(2,836

)

 

 

(4,689

)

Accounts payable

 

 

1,116

 

 

 

2,474

 

Accrued liabilities

 

 

(16,245

)

 

 

16,245

 

Deferred revenue

 

 

(222

)

 

 

(849

)

Accrued interest

 

 

1,720

 

 

 

(7,034

)

Other non-current assets and liabilities

 

 

(2,363

)

 

 

1,647

 

Net cash provided by operating activities from continuing operations

 

 

71,939

 

 

 

36,355

 

Investing activities from continuing operations:

 

 

 

 

 

 

Proceeds from sale of property and equipment

 

 

 

 

 

1,000

 

Purchases of property and equipment

 

 

(35,187

)

 

 

(2,833

)

Acquisition of intangible assets—capitalized software

 

 

(4,745

)

 

 

(1,171

)

Proceeds from (purchase of) interest rate caps

 

 

803

 

 

 

(8,629

)

Net cash used in investing activities from continuing operations

 

 

(39,129

)

 

 

(11,633

)

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

 

 

(5,438

)

 

 

(1,813

)

Payment of debt issuance costs

 

 

 

 

 

(20,251

)

Repurchases of common stock

 

 

(18,375

)

 

 

 

Payments on financing leases

 

 

(136

)

 

 

(154

)

Stock-based compensation activity

 

 

(2,703

)

 

 

(2,234

)

Net cash used in financing activities from continuing operations

 

 

(26,652

)

 

 

(326,223

)

Cash flows from discontinued operations:

 

 

 

 

 

 

Cash used in operating activities

 

 

 

 

 

(809

)

Cash used in investing activities

 

 

 

 

 

 

Cash used in financing activities

 

 

 

 

 

 

Net cash used in discontinued operations

 

 

 

 

 

(809

)

Effect of exchange rate changes on cash

 

 

65

 

 

 

28

 

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

 

 

6,223

 

 

 

(302,282

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

146,268

 

 

 

435,870

 

Cash, cash equivalents and restricted cash at end of period

 

$

152,491

 

 

$

133,588

 

Cash, cash equivalents and restricted cash at end of period

 

$

152,491

 

 

$

133,588

 

Less: current restricted cash

 

 

 

 

 

25

 

Less: non-current restricted cash

 

 

330

 

 

 

330

 

Cash and cash equivalents at end of period

 

$

152,161

 

 

$

133,233

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

Cash paid for interest

 

$

28,841

 

 

$

59,660

 

Cash paid for taxes

 

 

289

 

 

 

326

 

Non-cash investing activities:

 

 

 

 

 

 

Purchases of property and equipment in current liabilities

 

$

11,549

 

 

$

225

 

 

8

 


 

Gogo Inc. and Subsidiaries

Supplemental Information – Key Operating Metrics

 

 

For the Three Months
Ended September 30,

 

 

For the Nine Months
Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Aircraft online (at period end)

 

 

 

 

 

 

 

 

 

 

 

 

ATG

 

 

6,777

 

 

 

6,154

 

 

 

6,777

 

 

 

6,154

 

Satellite

 

 

4,484

 

 

 

4,542

 

 

 

4,484

 

 

 

4,542

 

Average monthly connectivity service revenue per aircraft online

 

 

 

 

 

 

 

 

 

 

 

 

ATG

 

$

3,376

 

 

$

3,264

 

 

$

3,342

 

 

$

3,216

 

Satellite

 

 

297

 

 

 

257

 

 

 

263

 

 

 

248

 

Units sold

 

 

 

 

 

 

 

 

 

 

 

 

ATG

 

 

388

 

 

 

266

 

 

 

944

 

 

 

583

 

Satellite

 

 

43

 

 

 

22

 

 

 

144

 

 

 

169

 

Average equipment revenue per unit sold (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

ATG

 

$

68

 

 

$

66

 

 

$

69

 

 

$

72

 

Satellite

 

 

39

 

 

 

102

 

 

 

50

 

 

 

52

 

 

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 September 30,

 

 

% Change

 

 

For the Nine Months
Ended September 30,

 

 

% Change

 

 

 

2022

 

 

2021

 

 

2022 over 2021

 

 

2022

 

 

2021

 

 

2022 over 2021

 

Service revenue

 

$

75,252

 

 

$

66,204

 

 

 

13.7

%

 

$

218,983

 

 

$

190,326

 

 

 

15.1

%

Equipment revenue

 

 

30,066

 

 

 

20,968

 

 

 

43.4

%

 

 

76,921

 

 

 

53,090

 

 

 

44.9

%

Total revenue

 

$

105,318

 

 

$

87,172

 

 

 

20.8

%

 

$

295,904

 

 

$

243,416

 

 

 

21.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months
Ended September 30,

 

 

% Change

 

 

For the Nine Months
Ended September 30,

 

 

% Change

 

 

 

2022

 

 

2021

 

 

2022 over 2021

 

 

2022

 

 

2021

 

 

2022 over 2021

 

Cost of service revenue (1)

 

$

17,297

 

 

$

12,985

 

 

 

33.2

%

 

$

47,683

 

 

$

42,257

 

 

 

12.8

%

Cost of equipment revenue (1)

 

$

19,261

 

 

$

12,368

 

 

 

55.7

%

 

$

50,410

 

 

$

31,582

 

 

 

59.6

%

 

(1)
Excludes depreciation and amortization expense.

 

 

9

 


 

Gogo Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

(in thousands, unaudited)

 

 

For the Three Months
Ended September 30,

 

 

For the Nine Months
Ended September 30,

 

 

For the Three Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2022

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

20,176

 

 

$

10,959

 

 

$

64,389

 

 

$

(65,974

)

 

$

22,017

 

Interest expense

 

 

8,781

 

 

 

10,943

 

 

 

29,442