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): June 18, 2014
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.) |
| 1250 North Arlington Heights Rd. Itasca, IL |
60143 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 630-647-1400
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)) |
Item 7.01 REGULATION FD DISCLOSURE.
On June 18, 2014, representatives of Gogo Inc. (the “Company”), will host its inagural Investor and Analyst Day at 8:00 a.m Central Time. Please visit Gogo’s website at www.gogoair.com under the “Investor Relations” tab for Webcast access information regarding this conference.
The Company will use the attached presentation for its Investor and Analyst Day. A copy of the presentation is attached hereto as Exhibit 99.1.
Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
| Exhibit No. |
Description | |
| 99.1 | Investor Presentation | |
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/ Norman Smagley | |
| Norman Smagley | ||
| Executive Vice President and Chief Financial Officer | ||
Date: June 18, 2014
EXHIBIT INDEX TO CURRENT REPORT ON FORM 8-K
Dated June 18, 2014
| 99.1 | Investor Presentation |
Exhibit 99.1
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Exhibit 99.1
Investor and Analyst Day
June 18, 2014
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TODAY’S AGENDA
Time Topic Speaker
8:00 am 8:05 am Welcome Varvara Alva, VP IR
8:05 am 8:40 am Strategic Positioning Michael Small, CEO
8:40 am 9:10 am Technology Roadmap Anand Chari, CTO
9:10 am 9:40 am CA North America Update Ash ElDifrawi, CCO
9:40 am 10:00 am Break Technology Display & Demos
10:00 am 10:30 am CA Rest of World Update Niels Steenstrup, SVP Int’l Sales
10:30 am 11:00 am Business Aviation Update John Wade, EVP BA
11:00 am 11:30 am Financials Norman Smagley, CFO
11:30 am 11:45 am Break / Lunch is served Technology Display & Demos
11:45 am 12:45 pm Group Q&A
12:45 pm 12:50 pm Closing Remarks Michael Small, CEO
1:00 pm 2:30 pm Headquarters Tours Buses depart at 1 pm from hotel
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DISCLAIMER
Safe Harbor Statement
This presentation contains “forward-looking statements” that are based on management’s beliefs and assumptions and on information currently available to management. Most forward-looking statements contain words that identify them as forward-looking, such as “anticipates,” “believes,” “continues,” “could,” “seeks,”
“estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms that relate to future events. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Gogo’s actual results, performance or achievements to be materially different from any projected results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent the beliefs and assumptions of Gogo only as of the date of this presentation and Gogo undertakes no obligation to update or revise publicly any such forward-looking statements, whether as a result of new information, future events or otherwise. As such, Gogo’s future results may vary from any expectations or goals expressed in, or implied by, the forward-looking statements included in this presentation, possibly to a material degree.
Gogo cannot assure you that the assumptions made in preparing any of the forward-looking statements will prove accurate or that any long-term financial or operational goals and targets will be realized. In particular, the availability and performance of certain technology solutions yet to be implemented by the Company set forth in this presentation represent aspirational long-term goals based on current expectations. For a discussion of some of the important factors that could cause Gogo’s results to differ materially from those expressed in, or implied by, the forward-looking statements included in this presentation, investors should refer to the disclosure contained under the heading “Risk Factors” and “Special Note Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2014.
Note to Certain Operating and Financial Data
In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), Gogo also discloses in this presentation certain non-GAAP financial information, including Adjusted EBITDA and Cash CapEx. These financial measures are not recognized measures under GAAP and are not intended to be, and should not be, considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. In addition, this presentation contains various customer metrics and operating data, including numbers of aircraft or units online, that are based on internal company data, as well as information relating to the commercial and business aviation market, and our position within those markets. While management believes such information and data are reliable, they have not been verified by an independent source and there are inherent challenges and limitations involved in compiling data across various geographies and from various sources.
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01 STRATEGIC POSITIONING
Michael Small
President & Chief Executive Officer
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AGENDA
Solid Track Record
Large In-Flight Market Opportunity
Leadership Position
Gogo Mission & Strategy
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SOLID TRACK RECORD
Total Revenue Service Revenue Adjusted EBITDA(*)
($M)($M)($M)
$49
$328 $250
$138M $41
increase
$8
73% 100%
CAGR CAGR
($89)
$37 $16
2009 2013 2009 2013 2009 2013
CA-ROW segment loss
* Please see reconciliation of Adjusted EBITDA in appendix. GOGOAIR.COM | 6
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INDUSTRY LEADING SCALE
Gogo Installed Total Awarded
Market Position(1) Market Share Aircraft Aircraft
CA–NA #1 76% 2,056 2,300+
CA–ROW #2 2% 5 332
BA ATG #1 94% 2,250 2,250
BA Satellite #1 63% 5,236 5,236
(1) Market position is as of 3/31/2014 and based on following:
CA-NA – based on publicly available information as of 03/31/14 for Panasonic, LiveTV, Global Eagle, ViaSat;
CA-ROW – based on backlog of awarded aircraft and management estimates re: Panasonic, Global Eagle, LiveTV and ViaSat backlog;
BA ATG – based on aircraft online and ViaSat Yonder aircraft online;
BA Satellite – based on aircraft online with Iridium telecommunication systems and TrueNorth and ICG estimated aircraft online GOGOAIR.COM | 7
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FAR AHEAD OF THE COMPETITION
CA Aircraft Online
2,056
663
2008
2009
2010
2011
2012
2013
2014 Q1
Gogo
Competitors(1)
Getting Technology Right Matters
Technology is one element, but critical
Deploying ATG provided six years of leadership
50+ million sessions to-date
Fraction of capex, compared to satellite systems
Full fleet deployments
Years ahead on experience curve
Leading scale and roadmap
1) Data based on publicly available information as of 03/31/14. Competitors include Panasonic, Global Eagle Entertainment, and LiveTV.
GOGOAIR.COM | 8
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AGENDA
Solid Track Record
Large In-Flight Market Opportunity
Leadership Position
Gogo Mission & Strategy
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WHAT PEOPLE HAVE SAID…
Too expensive and too slow
Not enough capacity
Only a small percent of
rich people will use it
The service is unreliable
This is what people said 25 years ago about wireless industry…
And now we are hearing the same thing
about the connected plane…
GOGOAIR.COM | 10
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WIRELESS SUBSCRIBER CONNECTIONS EXCEEDED
U.S. POPULATION IN 2011
Est. Subscriber
Connections
(M)
350
300
250
200
Burkina Faso, Africa Wireless Subscriber
150 Use a hand water pump, but enjoy Connections
cellular communications
100
50
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
CTIA Wireless Industry Indices Report, May 2013
GOGOAIR.COM | 11
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LARGE MARKET OF GLOBAL AIRCRAFT TO CONNECT
Today Future
~73,000(1)
44,000
27,000
17,000 + =
Global Global Global Global
Commercial Business Aircraft Aircraft
Aircraft Aircraft
1) Includes 36,000 aircraft for CA in 2033 and 37,000 aircraft for BA in 2023.
Sources: Boeing Current Market Outlook 2013 – 2032, excludes: cargo aircraft JetNet iQ Report Q1 2014; General Aviation Manufacturers Association 2012 Statistical Databook; excludes rest of world turbo props. GOGOAIR.COM | 12
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CONNECTING AIRCRAFT IS MORE VALUABLE
THAN YOU THINK
Connected Connected Connected
home car aircraft
0.97% of asset 0.71% of asset 0.84% of asset
value per year value per year value per year
$1.0M ARPA $0.7M ARPA $0.8M ARPA
$17B–$35B industry $12B–$25B industry $14B–$30B industry
Industry estimates were derived by taking the amount spent to provide connectivity to a home or automobile as a percentage of the average value of the asset.
This analogue in conjunction with an assumed $100M asset value for a commercial aircraft was used to arrive at ARPA. GOGOAIR.COM | 13
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FACTORS THAT MAKE CONNECTIVITY IN THE AIR
FAR MORE VALUABLE
Isolated, remote and mobile
Connectivity Complex and expensive asset
in the air is
valuable Real time requirements
Upscale captive audience
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AGENDA
Solid Track Record
Large In-Flight Market Opportunity
Leadership Position
Gogo Mission & Strategy
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CRITICAL MASS IS NEEDED TO ENTER THE BROADBAND
IFC MARKET AND SUCCEED
has the Critical Mass & experience
#1 globally
SCALE
>4,300
broadband aircraft online
START-UP
$0.63B
or ~$150,000 investment per plane
INVESTMENT
2006-2010
– operating expenses, cash capex, spectrum
CONTINUING
$154M(1) or ~$75,000 operating expense
INVESTMENT
2013
per CA plane
1) Represents CA-NA cost of service and other operating expenses excluding revenue share, depreciation and amortization expenses.
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WHY WE WIN
1 Specialize in aviation
2 End-to-end service provider
3 Superior technology and roadmap
4 Deliver excellent reliability
5 Flexible business model
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GOGO VIDEO #1
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2. END-TO-END SERVICE PROVIDER
AIRCRAFT REGULATORY NETWORK
OPERATIONS APPROVAL ENGINEERING
& DESIGN
CONNECTIVITY
NETWORK & PRODUCTS &
BANDWIDTH AIRLINE SERVICES
MANAGEMENT DEVELOPMENT
CUSTOMER CARE
& MARKETING
AIRCRAFT SUPPORT COMPLETE
CONNECTIVITY BACK-OFFICE
SOLUTIONS INFRASTRUCTURE
ENGINEERING AND SUPPORT
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3. GOGO IS BRINGING 100+ Mbps TO THE SKY…
Mbps Fixed networks Mobile networks Gogo
120
FTTH
100 LTE Spot
GPON Advanced
beam*
LTE
80 VDSL2
GTO/
60 VDSL HSPA 2Ku*
Evolved
40
HSPA
HSUPA
20 ADSL2+
SDSL HSDPA ATG ATG-4
UMTS
GSM GPRS EDGE
0
1996 2001 2006 2011 2016
* Expected date of availability
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3. SUPERIOR TECHNOLOGY AND ROADMAP
Broadest suite of leading technology solutions
Full fleet availability
Performance, cost & time to market benefits
Mbps
GTO / 2Ku
w/Spot
Beams*
100
GTO* 2Ku* Next
Gen ATG*
50 Global Ku w/Spot
Xpress* Beams*
Ku
ATG-4
0 ATG
2008 2010 2012 2014 2016 2018 2020
*Expected date of availability
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4. SERVICE RELIABILITY ROOTED IN SCALE
AND EXPERIENCE
50+ million 8,000+ flights
sessions per day
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5. FLEXIBLE MODEL – RESPONDING TO MARKET DEMAND
Passenger Airline
Flexible business model provides choice for airlines
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AGENDA
Solid Track Record
Large In-Flight Market Opportunity
Leadership Position
Gogo Mission & Strategy
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GOGO MISSION
Advance aviation by connecting every aircraft with the most trusted communications services on and above our planet
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GOGO FIVE POINT STRATEGY
1 Gain global share
2 Grow revenue per aircraft in Commercial Aviation – North America
3 Evolve technology roadmap to address market needs
4 Accelerate Business Aviation growth
5 Deliver consistent execution
GOGOAIR.COM | 26
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I N S U M M A R Y
POWERFUL COMPETITIVE ADVANTAGES.
MOMENTUM IS BUILDING.
SUPERIOR SOLUTIONS
THE ONLY PURE PLAY
LARGE GROWTH OPPORTUNITY
MARKET LEADER
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02 TECHNOLOGY ROADMAP
Anand Chari
Executive Vice President,
Engineering & Chief Technology Officer
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AGENDA
Recent Developments
Key Technology and Operating Strengths
Priorities Going Forward
GOGOAIR.COM | 29
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RECENT DEVELOPMENTS –
EXTENDING OUR TECHNOLOGY LEAD
Revolutionary 2Ku and GTO connectivity systems announced Strong results from ATG-4 upgrade program Global Ku satellite network established, Ku aircraft flying
6 Ku STC’s obtained, more underway
Boeing line-fit program underway New in-cabin products and services developed
GOGOAIR.COM | 30
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EXCLUSIVE 2Ku AND GTO TECHNOLOGIES WILL
DISRUPT THE GLOBAL AVIATION INDUSTRY
GTO: ATG-4
2Ku: Global
footprint
coverage
(North America)
(ROW)
Best global coverage with 2Ku – skew angle issue resolved Best spectral efficiency – higher speed at lower cost Half the height of traditional antenna – lower drag, fuel savings Best TV solution – same antenna for Internet and TV
GOGOAIR.COM | 31
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TYPICAL AERO ANTENNAS – SKEW ANGLE ISSUE
Tropical regions Higher skew angle More adjacent Poor performance
satellite and
interference economics
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CONVENTIONAL AERO ANTENNA
NYC TO RIO DE JANEIRO
Note antenna orientation toward
satellite, along skew line
JFK
GIG
Small skew, small twist, no interference
GOGOAIR.COM 33 | 33
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CONVENTIONAL AERO ANTENNA
NYC TO RIO DE JANEIRO
Note antenna orientation toward
satellite, along skew line
JFK
GIG
Moderate skew, moderate twist, moderate interference
GOGOAIR.COM 34
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CONVENTIONAL AERO ANTENNA
NYC TO RIO DE JANEIRO
Note antenna orientation toward
satellite, along skew line
JFK
GIG
High skew, high twist, high interference
GOGOAIR.COM | 35
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CONVENTIONAL AERO ANTENNA
NYC TO RIO DE JANEIRO
JFK
GIG
Maximum skew, maximum twist, maximum interference
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GOGO 2Ku AERO ANTENNA
NYC TO RIO DE JANEIRO
JFK
GIG
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GOGO 2Ku AERO ANTENNA
NYC TO RIO DE JANEIRO
JFK
GIG
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GOGO 2Ku AERO ANTENNA
NYC TO RIO DE JANEIRO
JFK
GIG
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GOGO 2Ku AERO ANTENNA
NYC TO RIO DE JANEIRO
JFK
GIG
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2Ku Offers Global Coverage with Superior
Performance and Economics
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ATG4 RETROFIT PROGRAM SHOWING STRONG RESULTS
ATG-4 demonstrates expected
performance improvement to the ~800
aircraft
Average latency on high usage 534
flights declined by 50% 436
Customer care contact rate on
ATG-4 tails declined by 49% 129
ATG-4 tails increased to 26% of 2012 2013 2014 Q1 2014
installed base as of Q1 2014 Target
Targeting highest usage flights first
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AGENDA
Recent Developments
Key Technology and Operating Strengths
Priorities Going Forward
GOGOAIR.COM | 43
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LEVERAGING STRONG TECHNOLOGY PLATFORM
Integrated
Best-in-class
three
operations
sub-networks
Best
Mature
coverage
technology
platform
Broadest
End-to-end
& best
service
solutions
provider
Strong platform
Unmatched service reliability
GOGOAIR.COM | 44
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1. THE MOST BROADBAND SOLUTIONS
AND BEST COVERAGE
Thales/ Global Gogo PAC ViaSat LiveTV Eagle
Business jets 2,250+ ATG 200+ satellite
Regional jets (limited)
Mainline jets Fastest time to deployment (ATG/ATG-4)
Multiple connectivity ATG/ATG- Ka Ka
4, SBB, Ku Ku
options Ku, Ka1 (Ku – TV) (limited Ku)
Global coverage Number of equipped ~2,100 ~340 ~100 ~540 aircraft (CA)2
1. Expected to be available in 2015.
2. As of 3/31/2014 based on public records and management estimates. GOGOAIR.COM | 45
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2. SUPERIOR TECHNOLOGY AND ROADMAP
Broadest suite of leading technology solutions
Full fleet availability
Performance, cost & time to market benefits
Mbps
GTO / 2Ku
w/Spot
Beams*
100
GTO* 2Ku* Next
Gen ATG*
50 Global Ku w/Spot
Xpress* Beams*
Ku
ATG-4
0 ATG
2008 2010 2012 2014 2016 2018 2020
*Expected date of availability
GOGOAIR.COM | 46
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3. STC PORTFOLIO IS THE LARGEST IN THE BROADBAND IN-FLIGHT CONNECTIVITY INDUSTRY AND IS GROWING
Number of aircraft
Airborne System Install time
types installed
ATG 33 Overnight
ATG-4 16 Overnight
Ku 6 3 days+
Gogo Vision 10 Overnight
Business Jets Hundreds Multi-day
Gogo has the most STCs in the industry and the fastest installation times
GOGOAIR.COM | 47
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4. OPERATING THREE NETWORKS TOGETHER DRIVES SUPERIOR RELIABILITY AND RAPID INNOVATION
Scalable and modular
architecture
Operational leverage
Rapid innovation and evolution
Reliable and mature hardware
and software platform
3
Airborne Network Aircraft To Ground Ground Infrastructure
Common in-cabin Connection Cell sites, teleports,
network ATG – Hybrid – Satellite NOC, Data centers,
1 2 servers 3
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AGENDA
Recent Developments
Key Technology and Operating Strengths
Priorities Going Forward
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KEY PRIORITIES
Bring more capacity to North American airlines
Retrofit more ATG-4 aircraft
Get GTO / 2Ku flying
Global expansion
Rapid rollout of Ku aircraft under contract
Get 2Ku flying
Add Ka (GlobalXpress) network
Rollout next generation in-cabin network technology
Line fit offerability of various solutions
GOGOAIR.COM | 50
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I N S U M M A R Y
GOGO PROVIDES SUPERIOR TECHNOLOGY
AND END-TO-END SOLUTIONS
Key Strengths
The Gogo Advantage
Scalable Trusted
Superior communication
service provider for
End-to-end airline’s FULL fleet
(all sizes, all routes,
Pure-play all times)
2Ku and GTO will transform global aviation industry
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03 CA NORTH AMERICA UPDATE
Ash ElDifrawi
Executive Vice President & Chief
Commercial Officer
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AGENDA
Strong Performance Record
Focused on Strong Airline Partnerships
Bending the Curve on Revenue
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STRONG CA REVENUE GROWTH
Aircraft Online ARPA(1) Total CA Revenue
($k)($M)
2,032 $101 $199
692
$24
$11
2009
2013
2009
2013
2009
2013
3X >4X 106% CAGR
1) Annualized average revenue per aircraft
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SIGNIFICANT RECURRING REVENUE GROWTH AND
LOYALTY TRENDS
Subscription Revenue High Repeat Usage
($M)(Repeat Passengers’ Sessions
as % of Total Sessions)
144% $73 73% 78%
CAGR 66%
$53 58%
$27
$5
2010 2011 2012 2013 2010 2011 2012 2013
Subscription base increased 4x Trend continuing into 2014
GOGOAIR.COM | 55
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LARGEST MARKET SHARE IN NORTH AMERICA
Aircraft Online as of March 31, 2014(1)
2,056
76% of connected aircraft
>4x the closest competitor
477
148
38
Gogo Global Eagle Panasonic LiveTV
1) Based on management estimates, trade publications and other public sources as of 3/31/2014.
GOGOAIR.COM | 56
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RECENT WINS ADD AIRCRAFT TO BACKLOG …
Recent wins:
Air Canada – 130 aircraft – ATG/ATG4
American Airlines Regional Jets – 30 aircraft
Aircraft awarded:
Installed as of Q1 – 2,056
Aircraft in backlog ~ 250
What’s left in North America:
United Regional Jets – ~200
American Regional Jets – ~200
Spirit Airlines and others – ~ 100
GOGOAIR.COM | 57
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AGENDA
Strong Performance Record
Focused on Strong Airline Partnerships
Bending the Curve on Revenue
GOGOAIR.COM | 58
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REDEFINING THE CUSTOMER …
Passenger Airline
Our Mission: Advance aviation by connecting every aircraft with the most trusted communications services on and above our planet
GOGOAIR.COM | 59
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BEING A TRUSTED AERO COMMUNICATION
SERVICE PROVIDER MEANS …
1 Network reliability and dependability
2 Adding more capacity to the network
3 Empowering amazing experiences
GOGOAIR.COM | 60
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1. DELIVERING RELIABILITY TO OUR AIRLINE PARTNERS
99%+ 99%+
ATG network ATG End-to-End
reliability System Availability
GOGOAIR.COM | 61
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2. MORE CAPACITY IS HAVING POSITIVE CUSTOMER IMPACT
ATG4 Plane Performance
Customer satisfaction
+48%
Customer care contact rate declined
-49%
Average latency
-50%
GOGOAIR.COM | 62
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3. PRODUCT INNOVATION TO MEET AIRLINE NEEDS
Gogo Vision – Ascend
Autonomous Mode Bundle
Alaska needed Delta wanted the
entertainment solution ability to sell
for flights to Hawaii connectivity pre-flight
that do not have as part of bundle
connectivity
GogoSphere
Virgin wanted an integrated partnership with Here on Biz
Domestic partner wanted to own the entire portal experience
GOGOAIR.COM | 63
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GOGO VIDEO #2
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AGENDA
Strong Performance Record
Focused on Strong Airline Partnerships
Bending the Curve on Revenue
GOGOAIR.COM | 65
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BENDING THE CURVE ON REVENUE
1 Expand airline offerings
2 Expand distribution channels
3 Launch operational applications
4 Leverage more capacity
4
3
2
1
GOGOAIR.COM | 66
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1. NEW PRODUCTS WILL INCREASE USAGE
Gogo Vision Text & Talk Gogo App
75%* interested to 79%* of passengers Central hub for all
access entertainment want to text products
(SITA) 33%* willing to pay for it In-air app store
72%* prefer to watch on
their own device Launched in BA, In-app payment
in beta test at CA, removes friction
1,400 installed as of expected commercial
3/31/2014 launch 2H’14 First release in Q3’14
* Gogo Global Category Attitude & Usage Study, October 2013
GOGOAIR.COM | 67
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2. BUILDING A GROUND DISTRIBUTION NETWORK
Airline Purchase Path Integration
Device Financial Manufacturers Services Revenue Companies
Travel Management Companies
GOGOAIR.COM | 68
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3. OPERATIONAL APPLICATIONS ARE TAKING OFF
Thousands of flight attendants are using devices connected to Gogo to manage onboard customer transactions
Airlines are exploring the use of electronic flight bags
Aircraft component manufacturers and other third party providers are interested in partnerships
Delta flight attendant
device interface
iPad based EFB
application
GOGOAIR.COM | 69
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4. MORE CAPACITY WILL UNLOCK GROWTH
Market expansion
70 – 100+
Mbps
3 – 10
Yield Mbps management
GOGOAIR.COM | 70
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PASSENGER, CREW AND AIRCRAFT OFFERINGS
WILL DRIVE REVENUE PER AIRCRAFT
Operational Apps
New products:
—Gogo Vision
—Text & Talk SOURCES
- Signature Services
Gogo Connectivity REVENUE
PASSENGERS CREW AIRCRAFT
Productive Constant Infrequent
Passengers Connectors Leisure Flyers
GOGOAIR.COM | 71
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I N S U M M A R Y
STRONG PERFORMANCE AND CLEAR DRIVERS
OF GROWTH
Focused on strong airline relationships
New products will engage the entire plane
Distribution network will enable selling everywhere
Operational applications represent attractive opportunity
More capacity will turbo-charge revenue per aircraft growth
GOGOAIR.COM | 72
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04 CA REST OF WORLD UPDATE
Niels Steenstrup Senior Vice President, International Sales
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AGENDA
International Market Opportunity
Why We Win
Key Priorities
GOGOAIR.COM | 74
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THE INTERNATIONAL MARKET IS LARGE & UNTAPPED
North America Rest of World
25% 75%
Total Aircraft1 ~4,000 ~13,000
Committed to IFC2 87% 17%
Uncommitted 13% 83%
…and growing at 2x the rate of the North American market
1. Based on Boeing Current Market Outlook 2013
2. Based on management estimates as of 3/31/2014 GOGOAIR.COM 75 |
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A CLOSER LOOK…
NORTH AMERICA EUROPE
Aircraft 25% Aircraft 25% Intl. Aircraft 3%
ASIA-PAC
Aircraft 30%
MIDDLE EAST/AFRICA
LATIN AMERICA Aircraft 9%
Aircraft 8%
Aircraft = % of global aircraft
Source: ATW World Airline Report, 2013 GOGOAIR.COM | 76
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IMPORTANCE OF WI-FI TO AIRLINE CHOICE
Importance of Wi-Fi Availability
(Top 3 Box)
56%
44%
36%
33%
29%
South America Asia Overall Europe
North America
* Gogo Global Category Attitude & Usage Study, October 2013. Question: How important are the following factors to you when choosing the airline for a trip (7 point scale)
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WI-FI DEVICE OWNERSHIP IS HIGH AMONG AIR TRAVELERS
Laptop / Netbook Tablet Smartphone
Total 83% 48% 72%
North America 79% 43% 62%
South America 90% 58% 81%
Asia 79% 48% 76%
Europe 86% 49% 73%
* Gogo Global Category Attitude & Usage Study, October 2013. Question: Which Wi-Fi enabled devices do you own or regularly use
GOGOAIR.COM | 78
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THE INTERNATIONAL MARKET IS AT AN INFLECTION POINT
U.S. market validates inflight connectivity demand worldwide
Competitive pressures driving decisions
Passenger demand influencing airline choice
Connectivity technology innovation
GOGOAIR.COM | 79
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MOMENTUM IS BUILDING
International Aircraft Wins
(cumulative)
332
Expanding presence internationally:
(2014 vs 2013)
1.8x
Opportunities in sales pipeline—150% increase
180 Number of Proposals submitted—400% increase
Sales force—100% increase
Added presence in 5 countries, 3 continents
2012 2013
GOGOAIR.COM | 80
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DELTA INTERNATIONAL ALONE WILL CREATE
COMPETITIVE DYNAMIC
Global WI-FI availability will pressure airlines to make IFC partner decision
GOGOAIR.COM | 81
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AGENDA
International Market Opportunity
Why We Win
Key Priorities
GOGOAIR.COM | 82
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WHY WE WIN
Specialize in aviation
End-to-end service provider
Superior technology and roadmap
Deliver excellent reliability
Flexible business model
GOGOAIR.COM | 83
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SIGNIFICANT PROGRESS TO-DATE
6 STCs received for Ku covering 125 aircraft
OPERATIONAL 3 day Ku install – fastest in the industry
19 Ku aircraft flying today
Global satellite network up and running
NETWORK 11 Teleports established in six locations
International sales & marketing staff increased to
approximately 20
SALES 332 Ku aircraft awarded(1)
2Ku trial commitments
1) Letter of Intent
GOGOAIR.COM | 84
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GOGO STOLE THE SHOW AT THE AIRCRAFT INTERIORS
EXPO FOR SECOND YEAR IN A ROW
Premier event for global aviation industry
Announced 2Ku – revolutionary technology for the global aviation industry
50+ airline meetings in 3 days (up by 60% from last year)
GOGOAIR.COM | 85
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AGENDA
International Market Opportunity
Why We Win
Key Priorities
GOGOAIR.COM | 86
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KEY PRIORITIES
Get Delta Air Lines, Japan Airlines and AeroMéxico flying by end of 2015
Reach 500 – 1,000 aircraft awarded by end of 2015
Establishes international presence
Enables long-term profitability
Positions for long-term growth
2Ku flying in 2015
GOGOAIR.COM | 87
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I N S U M M A R Y
UNIQUELY POSITIONED GLOBALLY.
MARKET AT INFLECTION POINT
Large untapped market
Market inflection point is reached
Gogo is best positioned
Focused on sales and execution
GOGOAIR.COM | 88
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05 | BUSINESS AVIATION UPDATE
John Wade
Executive Vice President & General Manager, Business Aviation
GOGOAIR.COM | 89
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AGENDA
Business Today
Market Opportunity
Key Priorities
GOGOAIR.COM | 90
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ESTABLISHED LEADER IN BUSINESS AVIATION MARKET
Voice and narrowband data High-speed internet and Text & Voice and light internet with
with global coverage Talk for the continental U.S., near-global coverage
Canada, and portions of Alaska
5,236 aircraft online 2,250 aircraft online 16 aircraft online
63%* market share 94%* market share Started selling service
in 2013
* Aircraft online is as of 3/31/2014. Market share is derived using market size from JetNet iQ Report Q1 2014, publicly available competitive information and management estimates as of 3/31/2014.
GOGOAIR.COM | 91 ONLY COMPANY OFFERING CONNECTIVITY THROUGH ALL THREE NETWORKS
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LEADERSHIP POSITION IN BUSINESS
AVIATION MARKET
Market leader & innovator
Broadest product offerings
Deep and long term customer relationships
Global sales & distribution
GOGOAIR.COM | 92
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STRONG BA REVENUE GROWTH AND PROFITABILITY
BA Revenue BA Segment Profit
($M)($M)
$127 $51
49%
CAGR 103%
CAGR
$26
$3
2009 2013 2009 2013
GOGOAIR.COM | 93
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RECENT PRODUCT AND SERVICE ANNOUNCEMENTS
SUPPORT LONG TERM GROWTH STRATEGY
Leverage Add New Products Expand
Existing Networks & Services Internationally
ATG 2000 Gogo Text & Talk Inmarsat
FANS over Iridium Gogo OnePhone SwiftBroadband
Universal Cabin System Global Xpress
Gogo Vision
Gogo Cloud
GOGOAIR.COM | 94
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UNIVERSAL CABIN SYSTEM IS THE FIRST
ALL-IN-ONE SMART ROUTER AND MEDIA SERVER
In-Cabin In-Cabin
Devices Capabilities
Wi-Fi 3G/4G
Bridge Modem
Permits access to all in-cabin wireless services with a single log on
Offers data compression – maximizes efficiency & increases throughput
Updates onboard content & software timely with minimal intervention
Saves costs, size and power
GOGOAIR.COM | 95
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AGENDA
Business Today
Market Opportunity
Key Priorities
GOGOAIR.COM | 96
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MARKET OPPORTUNITY IS LARGE AND GROWING
Business Aviation Market
1.3x
36,000
27,000 11,000
Rest of World 7,000
25,000
North America 20,000
ATG has penetrated only 11% of the North America market
2013 2023F
Sources: JetNet iQ Report Q1 2014; General Aviation Manufacturers Association 2012 Statistical Databook.
Excludes rest of world turbo props. GOGOAIR.COM | 97
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OUR INDUSTRY-LEADING PRODUCT & SERVICE
OFFERINGS SET US APART
C O M P E T I T O R S 1
Features Gogo Hardware & Service Resellers Hardware
Service Providers & Wholesalers Providers
Air to Ground
Iridium
Inmarsat
Ku
Services Ka Global Xpress
Ground Wi-Fi
Turn-key Content
Text & Talk
Air to Ground
Iridium
Equipment Inmarsat
Inflight Entertainment
In-Cabin Network
24/7 Customer Service
On the ground 24/7 NOC
1. Competitors include: Rockwell Collins, Honeywell, SatCom Direct, Satcom1, ICG, TrueNorth, ViaSat
GOGOAIR.COM | 98
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WHY WE WIN
Only company offering connectivity through all three networks Broadest mix of hardware and services Scale, expertise, and credibility Award winning global 24/7 service and support
GOGOAIR.COM | 99
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AGENDA
Business Today
Market Opportunity
Key Priorities
GOGOAIR.COM | 100
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KEY PRIORITIES
3
2
1 Maintain
Increase technology
Accelerate leadership
aircraft online ARPU
growth
GOGOAIR.COM | 101
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1. ACCELERATE AIRCRAFT GROWTH
ATG Iridium Swift Broadband
20,000 market 18,000 market 18,000 market
All others All others 8%
Gogo 1%
11% Gogo 29%
Available Aircraft
Available 54% All Available aircraft Others aircraft 88% 17% 92%
Strategy Strategy Strategy
Differentiated equipment FANS over Iridium Set up international
Differentiated service Next generation Iridium infrastructure
pricing equipment Launch SBB airtime
Sources: JetNet iQ Report Q1 2014; General Aviation Manufacturers Association 2012 Statistical Databook; excludes rest of world turbo props, publicly available information as of 03/31/14 and management estimates.
GOGOAIR.COM | 102
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2. INCREASE REVENUE BY SELLING MORE
EQUIPMENT & SERVICES TO INSTALLED BASE
Today Future
GogoBiz - In-Flight Connectivity
Iridium Voice
GogoBiz - In-Flight Connectivity FANs over Iridium
Iridium Voice Gogo OnePhone
Gogo Text & Talk
Gogo Vision
Universal Cabin System
Gogo Operations-Oriented
Communications Services
GOGOAIR.COM | 103
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I N S U M M A R Y
KEY MESSAGES TODAY
Market leader and innovator
Large growth opportunity
Multiple growth drivers
Broadest product and service offerings
Clear and profitable business model
GOGOAIR.COM | 104
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06 FINANCIALS
Norman Smagley
Executive Vice President & Chief Financial Officer
GOGOAIR.COM | 105
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AGENDA
Strong Performance
Business Aviation
Commercial Aviation North America
Commercial Aviation Rest of the World
Key Takeaways
GOGOAIR.COM | 106
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GROWING REVENUE DRIVES PROFITABILITY
Revenue Adjusted EBITDA*
($M)($M)
$353 $63
$328 $49
$24 $52
$41
73% $234 $14
CAGR $9 $8 $11
($1)
$160
CA-ROW
Segment Loss
$95($45)
$37
($89)
2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014
Q1 LTM Q1 LTM
* Please see reconciliation of Adjusted EBITDA in appendix.
GOGOAIR.COM | 107
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PROVEN OPERATING LEVERAGE
Cost of Goods Sold
130%(% of revenue)
Consolidated COGS
48% 51% Consolidated COGS excl. CA-ROW
46% Consolidated COGS excl. CA-ROW and
40% assuming no change to Rev Share %(1)
2009 2011 2012 2013
Engineering, Design General & Sales &
& Development Administrative Marketing
(% of revenue)(% of revenue) 75%(% of revenue)
59% 77%
15% 15% 21% 21% 11% 9%
2009 2012 2013 2009 2012 2013 2009 2012 2013
(1) Revenue share percentage earned by our airline partners was 11.6% or $9.7 million for the year ended December 31, 2011, 18.5% or $24.5 million for the year ended December 31, 2012, 20.9% or $41.1 million for the year ended
December 31, 2013, and 20.3% or $11.5 million for the three months ended March 31, 2014. The line footnoted above represents Cost of Goods Sold as Percentage of Revenue using the average revenue share percentage earned by
our airline partners during the year ended December 31, 2011 for all subsequent years. We expect the revenue share percentages under certain of our connectivity agreements to increase in future periods due to the occurrence of
contractually stipulated triggering events that have yet to occur. We currently estimate that such increases will amount to approximately 2% of the CA-NA segment’s service revenue. GOGOAIR.COM | 108
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OUR SEGMENTS ARE IN DIFFERENT PHASES
BA:
Strong revenue growth
Strong segment profitability and FCF
CA-NA:
Strong revenue growth
Break-even segment profitability
CA-ROW:
Investment phase
Focusing on signing airlines and investing for growth
GOGOAIR.COM | 109
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AGENDA
Strong Performance
Business Aviation
Commercial Aviation North America
Commercial Aviation Rest of the World
Key Takeaways
GOGOAIR.COM | 110
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STRONG GROWTH IN ALL KPIs DRIVE REVENUE GROWTH
Revenue 2009–2013 Change
($M)
$140
49% $127 ATG AIRCRAFT ONLINE 40x
CAGR
$98 ATG UNITS SHIPPED 6x
ATG SERVICE ARPU 4x
$26
ATG EQUIPMENT ARPU 1.5x
2009 2012 2013 2014 Q1
LTM
GOGOAIR.COM | 111
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PROFITABILITY DRIVEN BY GROWING SERVICE REVENUE
Service Revenue Segment Profit
($M) ($M)
24% $6 2009
$34 35% 2012
$52 41% 2013
$57 41% 2014 Q1
11% $3 2009
$36 36% 2012
$51 40% 2013
$58 41% 2014 Q1
LTM LTM
% of Total BA Revenue Segment Profit Margin
GOGOAIR.COM | 112
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O U R F O C U S :
REVENUE = AIRCRAFT X ARPA
TODAY TOMORROW
INCREASE
AIRCRAFT Current aircraft online Expand market share
In-Flight Connectivity
In-Flight Connectivity Gogo Vision
INCREASE Telecommunication Gogo Text & Talk
$ ARPU Services Gogo Operations-Oriented
Communications Services
Universal Cabin System
GOGOAIR.COM | 113
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AGENDA
Strong Performance
Business Aviation
Commercial Aviation North America
Commercial Aviation Rest of the World
Key Takeaways
GOGOAIR.COM | 114
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STRONG GROWTH ACROSS ALL KPIs DRIVE
SIGNIFICANT REVENUE GROWTH
Revenue 2009–2013 Change
($M)
$213 ARPP 5x
$199
ARPA 4x
$134
AIRCRAFT ONLINE 3x
TAKE RATE 2x
$11 ARPS 2x
2009 2012 2013 2014 Q1
LTM
106% CAGR
GOGOAIR.COM | 115
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DEMONSTRATED SIGNIFICANT OPERATING LEVERAGE
Cost of Goods Sold Other Operating Expenses Segment Profit
(% of Revenue) Excluding D&A (% of Revenue)
(% of Revenue)
12%
59% 56% 71%
52% 51% 2%
41% 52% 47% -1%
45%
-9%
Assuming constant Assuming constant
revenue share %(1) revenue share %(1)
-30%
2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 2013 2014
Q1 LTM Q1 LTM Q1 LTM
(1) Revenue share percentage earned by our airline partners was 11.6% or $9.7 million for the year ended December 31, 2011, 18.5% or $24.5 million for the year ended December 31, 2012, 20.9% or $41.1 million for the year ended
December 31, 2013, and 20.3% or $11.5 million for the three months ended March 31, 2014. The line footnoted above represents Cost of Goods Sold as Percentage of Revenue using the average revenue share percentage earned by
our airline partners during the year ended December 31, 2011 for all subsequent years. We expect the revenue share percentages under certain of our connectivity agreements to increase in future periods due to the occurrence of
contractually stipulated triggering events that have yet to occur. We currently estimate that such increases will amount to approximately 2% of the CA-NA segment’s service revenue. GOGOAIR.COM | 116
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O U R F O C U S :
REVENUE = ARPA X AIRCRAFT
TODAY TOMORROW
In-Flight Connectivity
Gogo Vision
INCREASE In-Flight Connectivity Gogo Text Messaging
Gogo Signature Services
$ REVENUE PER Gogo Operations-Oriented
AIRCRAFT Communications Services
All Passengers
Business Passengers Media Partners
Aircraft Operators
INCREASE
AIRCRAFT Aircraft under contract More aircraft
GOGOAIR.COM | 117
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AGENDA
Strong Performance
Business Aviation
Commercial Aviation North America
Commercial Aviation Rest of the World
Key Takeaways
GOGOAIR.COM | 118
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INVESTING FOR FUTURE GROWTH
CA-ROW Segment Loss
($M)
$41
$14
$17
2012
2013
2014 Q1
2012 – Launched international operations
2013 – Established global Ku network, began development of industry leading technology solutions
2014 – announced 2Ku, first Ku equipped aircraft flying, multiple STCs received
GOGOAIR.COM | 119
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OUR FOCUS: REVENUE = AIRCRAFT X ARPA
LAUNCH TOMORROW
INCREASE
AIRCRAFT More Airlines
In-Flight Connectivity
Gogo Vision
In-Flight Connectivity Gogo Text Messaging
GROW Gogo Signature Services
Gogo Operations-Oriented
$ REVENUE PER Communications Services
AIRCRAFT
All Passengers
Business Passengers Media Partners
Aircraft Operators
GOGOAIR.COM | 120
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O U R F O C U S :
DRIVE REST OF WORLD TOWARDS PROFITABILITY
Get 300 aircraft flying by end of 2015
Expect high incremental margin
2Ku flying in 2015
Half the bandwidth cost of competing solutions
Reach 500–1,000 aircraft awarded by end of 2015
Enables long-term profitability
GOGOAIR.COM | 121
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AGENDA
Strong Performance
Business Aviation
Commercial Aviation North America
Commercial Aviation Rest of the World
Key Takeaways
GOGOAIR.COM | 122
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CLEAR LINE OF SIGHT TO CONSOLIDATED PROFITABILITY
AND FREE CASH FLOW
BA – strong growth, profitability and free cash flow
CA-NA – strong growth, break-even and on the way to strong profitability and cash flow
CA-ROW – momentum is building
GOGOAIR.COM | 123
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FACTORS THAT WILL DRIVE CONSOLIDATED EBITDA GROWTH IN 2015 AND BEYOND
Continued strong growth in aircraft and revenue per aircraft
Underlying operating leverage continues, headwinds subside
CA NA revenue share stabilizes
CA ROW generates revenue
Step up in spending for globalization is absorbed
Fasten your seat belts!
GOGOAIR.COM | 124
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GROUP Q&A
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
GOGOAIR.COM | 125
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CLOSING REMARKS
Michael Small
President & Chief Executive Officer
GOGOAIR.COM | 126
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I N S U M M A R Y
POWERFUL COMPETITIVE ADVANTAGES.
MOMENTUM IS BUILDING.
SUPERIOR SOLUTIONS
THE ONLY PURE PLAY
LARGE GROWTH OPPORTUNITY
MARKET LEADER
GOGOAIR.COM | 127
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APPENDIX
2014 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
GOGOAIR.COM | 128
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RECONCILIATION OF ADJUSTED EBITDA ($MM)
2009 2010 2011 2012 2013 2014 Q1
Net Income (142) (140) (18) (96) (146) (17)
Interest Income (0) (0) (0) (0) (0) (0)
Interest Expense 30 – 1 9 29 7
Income Tax Provision – 3 1 1 1 0
Depreciation & Amortization 22 31 33 37 56 16
EBITDA (91) (106) 16 (49) (60) 6
Fair Value Derivative Adjustments – 33 (59) (10) 36 -
Class A and Class B Senior Convertible
Preferred Stock Return – 18 31 52 29 -
Accretion of Preferred Stock – 9 10 10 5 -
Stock-based Compensation Expense 1 2 2 4 6 2
Loss on Extinguishment of Debt 2 – – – – -
Write Off of Deferred Equity Financing
Costs – – – 5 – -
Amortization of Deferred Airborne Lease
Incentives – (1) (1) (4) (8) (3)
Adjusted EBITDA (89) (45) (1) 9 8 5
Note: Minor differences exist due to rounding
GOGOAIR.COM | 129