First Quarter Revenue of $98.6 million, up 6% Year-over-Year; Net Income
of $20.4 million; and Adjusted
EBITDA(1) of $39.7
million
BROOMFIELD, Colo., May 3, 2023
/PRNewswire/ -- 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 March 31, 2023.
Q1 2023 Highlights
- Total revenue of $98.6 million
increased 6% compared to Q1 2022, fueled by strong growth in
service revenue.
-
- Record service revenue of $78.5
million increased 11% compared to Q1 2022 and 1% compared to
Q4 2022.
- Equipment revenue of $20.1
million decreased 9% compared to Q1 2022 and 35% compared to
record equipment revenue in Q4 2022.
- AVANCE equipment units shipped totaled 223, a decrease of 9%
compared to Q1 2022 and 43% compared to Q4 2022.
- Total ATG aircraft online ("AOL") reached 7,046 an increase of
8% compared to Q1 2022 and 2% compared to Q4 2022.
-
- Total AVANCE AOL grew to 3,447,
an increase of 28% compared to Q1 2022 and 5% compared to Q4
2022. AVANCE units comprised approximately 49% of total AOL as of
March 31, 2023, up from 41% as of March 31, 2022.
- Average Monthly Revenue per ATG aircraft online ("ARPU") of
$3,389 increased 2% compared to Q1
2022 and increased slightly compared to Q4 2022.
- Net income decreased to $20.4
million in Q1 2023 from $22.2
million in Q1 2022. Q1 2023 net income is net of a
$4.4 million income tax provision
compared to a provision of $1.9
million in Q1 2022.
-
- Diluted earnings per share was $0.15 compared to $0.18 in Q1 2022, driven primarily by lower net
income in Q1 2023.
- Adjusted EBITDA(1) of $39.7
million, which includes approximately $1.5 million of operating expenses related to
Global Broadband, decreased 7% compared to Q1 2022 and 14% compared
to Q4 2022.
- Cash provided by operating activities of $18.5 million in Q1 2023 increased from
$17.9 million in the prior year
period.
-
- Free Cash Flow(1) was $20.0
million in Q1 2023 compared to $8.8
million in the prior-year period and decreased from
$25.0 million in Q4 2022.
- Cash, cash equivalents and short-term investments totaled
$188.0 million as of March 31, 2023, compared to $175.3 million as of December 31, 2022.
- On May 3, the Company will pay
down $100 million principal amount of
its outstanding Term Loan. The transaction will reduce
the Company's cash interest by approximately $4.5 million in 2023 based on forward SOFR rates
and $8.5 million on an annualized
basis based on current SOFR rates.
"Channel momentum is building for our on-track launches of 5G in
Q4 this year and our LEO-based Global Broadband product in the
second half of 2024," said Oakleigh
Thorne, Chairman and CEO. "Business aviation demand for
inflight connectivity remains robust and we expect our channel
partners to make continued progress in installing our record 2022
equipment shipments."
"Gogo reiterates its 2023 guidance and anticipates approximately
50% year-over-year growth in Free Cash Flow while incurring
$30 million in 5G and GBB investments
and other operational initiatives," said Jessi Betjemann, Executive Vice President and
CFO. "Our $100 million debt paydown
will reduce cash interest by approximately $8.5 million on an annualized basis and we
reiterate our target for over $200
million in Free Cash Flow in 2025."
2023 Financial Guidance and Long-Term Financial
Targets
The Company reiterates the following guidance for
2023:
- Total revenue in the range of $440
million to $455 million.
- Adjusted EBITDA(1) of $150
million to $160 million,
reflecting operating expenses of approximately $30 million for strategic and operational
initiatives including Gogo 5G and Global Broadband.
- Free Cash Flow(1) of $80
million to $90 million. Free
Cash Flow includes capital expenditures of approximately
$30 million to $40 million, of which $20
million is tied to Gogo 5G.
The Company reiterates the following long-term financial
targets:
- Revenue growth at a compound annual growth rate of
approximately 17% from 2022 through 2027, with Global Broadband
contributing to revenue beginning in 2025.
- Annual Adjusted EBITDA Margin(1) in the mid-40%
range by 2027.
- Free Cash Flow(1) of more than $200 million beginning in 2025 and growing
thereafter.
The Company's 2023 financial guidance and long-term targets
include Gogo 5G and Global Broadband but do not reflect the impact
of the Federal Communications Commission's Secure and Trusted
Communications Networks Reimbursement Program (the "FCC
Program"). The Company plans to provide financial guidance on
its second quarter 2023 earnings call regarding its planned
participation in the FCC program.
(1)
|
See "Non-GAAP Financial
Measures" below.
|
Conference Call
The Company will host its first quarter conference call on
May 3, 2023, 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/BI0e1a1410059648adb2f3169167b910c8
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 2023, Adjusted
EBITDA Margin for fiscal 2027 and Free Cash Flow for fiscal 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 continue to generate revenue from the provision of our
connectivity services; our reliance on our key OEMs and dealers for
equipment sales; the impact of competition; our reliance on third
parties for equipment components and services; the impact of global
supply chain and logistics issues and increasing inflation; our
ability to expand our business outside of the United States; our ability to recruit,
train and retain highly skilled employees; the impact of pandemics
or other outbreaks of contagious diseases, including the COVID-19
pandemic, and the measures implemented to combat them; the impact
of adverse economic conditions; our ability to fully utilize
portions of our deferred tax assets; the impact of increased
attention to climate change, ESG matters and conservation measures;
our ability to evaluate or pursue strategic opportunities; our
ability to develop and deploy Gogo 5G, Global Broadband or other
next generation technologies; our ability to maintain our rights to
use our licensed 3Mhz of ATG spectrum in the United States and obtain rights to
additional spectrum if needed; the impact of service interruptions
or delays, technology failures, equipment damage or system
disruptions or failures; the impact of assertions by third parties
of infringement, misappropriation or other violations; our ability
to innovate and provide products and services; our ability to
protect our intellectual property rights; the impact of our use of
open-source software; the impact of equipment failure or material
defects or errors in our software; our ability to comply with
applicable foreign ownership limitations; the impact of government
regulation of the internet and conflict minerals; our possession
and use of personal information; risks associated with
participation in the FCC Program; our ability to comply with
anti-bribery, anti-corruption and anti-money laundering laws; the
extent of expenses, liabilities or business disruptions resulting
from litigation; the impact of global climate change and legal,
regulatory or market responses to it; the impact of 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;
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,
2022 as filed with the Securities and Exchange Commission
("SEC") on February 28, 2023 and in
our quarterly report on Form 10-Q as filed with the SEC on
May 3, 2023.
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 March 31, 2023, Gogo reported 3,447 business aircraft
flying with Gogo's AVANCE L5 or L3 system installed, 7,046 aircraft
flying with its ATG systems onboard, and 4,458 aircraft with
narrowband satellite connectivity installed. Connect with us at
business.gogoair.com.
Investor Relations
Contact:
|
Media Relations Contact:
|
William
Davis
|
Dave Mellin
|
+1
917-519-6994
|
+1
720-840-4788
|
wdavis@gogoair.com
|
dmellin@gogoair.com
|
Gogo Inc. and
Subsidiaries Unaudited Condensed Consolidated Statements
of Operations (in thousands, except per share
amounts)
|
|
|
|
For the Three
Months
Ended March 31,
|
|
|
|
2023
|
|
|
2022
|
|
Revenue:
|
|
|
|
|
|
|
Service
revenue
|
|
$
|
78,499
|
|
|
$
|
70,667
|
|
Equipment
revenue
|
|
|
20,098
|
|
|
|
22,083
|
|
Total
revenue
|
|
|
98,597
|
|
|
|
92,750
|
|
Operating
expenses:
|
|
|
|
|
|
|
Cost of service
revenue (exclusive of amounts shown below)
|
|
|
16,797
|
|
|
|
14,634
|
|
Cost of equipment
revenue (exclusive of amounts shown below)
|
|
|
18,126
|
|
|
|
14,281
|
|
Engineering, design
and development
|
|
|
7,879
|
|
|
|
5,406
|
|
Sales and
marketing
|
|
|
6,877
|
|
|
|
6,231
|
|
General and
administrative
|
|
|
14,199
|
|
|
|
13,458
|
|
Depreciation and
amortization
|
|
|
2,791
|
|
|
|
3,791
|
|
Total operating
expenses
|
|
|
66,669
|
|
|
|
57,801
|
|
Operating
income
|
|
|
31,928
|
|
|
|
34,949
|
|
Other expense
(income):
|
|
|
|
|
|
|
Interest
income
|
|
|
(1,916)
|
|
|
|
(47)
|
|
Interest
expense
|
|
|
8,976
|
|
|
|
10,889
|
|
Other expense
(income), net
|
|
|
31
|
|
|
|
(26)
|
|
Total other
expense
|
|
|
7,091
|
|
|
|
10,816
|
|
Income before income
taxes
|
|
|
24,837
|
|
|
|
24,133
|
|
Income tax
provision
|
|
|
4,388
|
|
|
|
1,937
|
|
Net
income
|
|
$
|
20,449
|
|
|
$
|
22,196
|
|
|
|
|
|
|
|
|
Net income
attributable to common stock per share:
|
|
|
|
|
|
|
Basic
|
|
$
|
0.16
|
|
|
$
|
0.20
|
|
Diluted
|
|
$
|
0.15
|
|
|
$
|
0.18
|
|
Weighted average
number of shares:
|
|
|
|
|
|
|
Basic
|
|
|
129,136
|
|
|
|
111,414
|
|
Diluted
|
|
|
133,602
|
|
|
|
134,095
|
|
Gogo Inc. and
Subsidiaries Unaudited Condensed Consolidated Balance
Sheets (in thousands)
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
163,266
|
|
|
$
|
150,550
|
|
Short-term
investments
|
|
|
24,728
|
|
|
|
24,796
|
|
Total cash, cash
equivalents and short-term investments
|
|
|
187,994
|
|
|
|
175,346
|
|
Accounts receivable,
net of allowances of $1,532 and $1,778, respectively
|
|
|
46,698
|
|
|
|
54,210
|
|
Inventories
|
|
|
54,496
|
|
|
|
49,493
|
|
Prepaid expenses and
other current assets
|
|
|
46,259
|
|
|
|
45,100
|
|
Total current
assets
|
|
|
335,447
|
|
|
|
324,149
|
|
Non-current
assets:
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
104,685
|
|
|
|
104,595
|
|
Intangible assets,
net
|
|
|
50,444
|
|
|
|
49,509
|
|
Operating lease
right-of-use assets
|
|
|
73,468
|
|
|
|
75,261
|
|
Other non-current
assets, net of allowances of $487 and $501, respectively
|
|
|
34,478
|
|
|
|
43,355
|
|
Deferred income
taxes
|
|
|
160,716
|
|
|
|
162,657
|
|
Total non-current
assets
|
|
|
423,791
|
|
|
|
435,377
|
|
Total
assets
|
|
$
|
759,238
|
|
|
$
|
759,526
|
|
Liabilities and
stockholders' deficit
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
14,487
|
|
|
$
|
13,646
|
|
Accrued
liabilities
|
|
|
49,300
|
|
|
|
60,056
|
|
Deferred
revenue
|
|
|
2,357
|
|
|
|
3,418
|
|
Current portion of
long-term debt
|
|
|
7,250
|
|
|
|
7,250
|
|
Total current
liabilities
|
|
|
73,394
|
|
|
|
84,370
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
Long-term
debt
|
|
|
688,991
|
|
|
|
690,173
|
|
Non-current operating
lease liabilities
|
|
|
77,265
|
|
|
|
79,241
|
|
Other non-current
liabilities
|
|
|
7,731
|
|
|
|
7,611
|
|
Total non-current
liabilities
|
|
|
773,987
|
|
|
|
777,025
|
|
Total
liabilities
|
|
|
847,381
|
|
|
|
861,395
|
|
Stockholders'
deficit
|
|
|
|
|
|
|
Common
stock
|
|
|
14
|
|
|
|
14
|
|
Additional paid-in
capital
|
|
|
1,386,295
|
|
|
|
1,385,933
|
|
Accumulated other
comprehensive income
|
|
|
23,043
|
|
|
|
30,128
|
|
Treasury stock, at
cost
|
|
|
(158,375)
|
|
|
|
(158,375)
|
|
Accumulated
deficit
|
|
|
(1,339,120)
|
|
|
|
(1,359,569)
|
|
Total stockholders'
deficit
|
|
|
(88,143)
|
|
|
|
(101,869)
|
|
Total liabilities
and stockholders' deficit
|
|
$
|
759,238
|
|
|
$
|
759,526
|
|
Gogo Inc. and
Subsidiaries Unaudited Condensed Consolidated Statements
of Cash Flows (in thousands)
|
|
|
|
For the Three
Months
Ended March 31,
|
|
|
|
2023
|
|
|
2022
|
|
Operating
activities:
|
|
|
|
|
|
|
Net
income
|
|
$
|
20,449
|
|
|
$
|
22,196
|
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
2,791
|
|
|
|
3,791
|
|
Loss on asset
disposals, abandonments and write-downs
|
|
|
107
|
|
|
|
14
|
|
Provision for expected
credit losses
|
|
|
93
|
|
|
|
259
|
|
Deferred income
taxes
|
|
|
4,273
|
|
|
|
1,887
|
|
Stock-based
compensation expense
|
|
|
5,041
|
|
|
|
4,007
|
|
Amortization of
deferred financing costs and interest rate caps
|
|
|
764
|
|
|
|
947
|
|
Accretion of debt
discount
|
|
|
108
|
|
|
|
115
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
7,405
|
|
|
|
(4,571)
|
|
Inventories
|
|
|
(5,003)
|
|
|
|
(2,491)
|
|
Prepaid expenses and
other current assets
|
|
|
(8,632)
|
|
|
|
392
|
|
Contract
assets
|
|
|
557
|
|
|
|
(2,407)
|
|
Accounts
payable
|
|
|
1,191
|
|
|
|
(857)
|
|
Accrued
liabilities
|
|
|
(9,620)
|
|
|
|
(5,926)
|
|
Deferred
revenue
|
|
|
(1,054)
|
|
|
|
(226)
|
|
Accrued
interest
|
|
|
130
|
|
|
|
1,349
|
|
Other non-current
assets and liabilities
|
|
|
(86)
|
|
|
|
(613)
|
|
Net cash provided
by operating activities
|
|
|
18,514
|
|
|
|
17,866
|
|
Investing
activities:
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(3,112)
|
|
|
|
(7,598)
|
|
Acquisition of
intangible assets—capitalized software
|
|
|
(1,484)
|
|
|
|
(1,457)
|
|
Proceeds from interest
rate caps
|
|
|
6,087
|
|
|
|
—
|
|
Redemptions of
short-term investments
|
|
|
24,796
|
|
|
|
—
|
|
Purchases of
short-term investments
|
|
|
(24,728)
|
|
|
|
—
|
|
Net cash provided
by (used in) investing activities
|
|
|
1,559
|
|
|
|
(9,055)
|
|
Financing
activities:
|
|
|
|
|
|
|
Payments on term
loan
|
|
|
(1,813)
|
|
|
|
(1,813)
|
|
Payments on financing
leases
|
|
|
(57)
|
|
|
|
(43)
|
|
Stock-based
compensation activity
|
|
|
(5,575)
|
|
|
|
(23)
|
|
Net cash used in
financing activities
|
|
|
(7,445)
|
|
|
|
(1,879)
|
|
Effect of exchange
rate changes on cash
|
|
|
88
|
|
|
|
(16)
|
|
Increase in cash,
cash equivalents and restricted cash
|
|
|
12,716
|
|
|
|
6,916
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
|
150,880
|
|
|
|
146,268
|
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
|
163,596
|
|
|
$
|
153,184
|
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$
|
163,596
|
|
|
$
|
153,184
|
|
Less: current
restricted cash
|
|
|
—
|
|
|
|
25
|
|
Less: non-current
restricted cash
|
|
|
330
|
|
|
|
330
|
|
Cash and cash
equivalents at end of period
|
|
$
|
163,266
|
|
|
$
|
152,829
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
15,014
|
|
|
$
|
8,577
|
|
Cash paid for
taxes
|
|
|
12
|
|
|
|
0
|
|
Non-cash investing
activities:
|
|
|
|
|
|
|
Purchases of property
and equipment in current liabilities
|
|
$
|
9,973
|
|
|
$
|
7,993
|
|
Gogo Inc. and
Subsidiaries Supplemental Information – Key Operating
Metrics
|
|
|
|
For the Three
Months
Ended March 31,
|
|
|
|
2023
|
|
|
2022
|
|
Aircraft online (at
period end)
|
|
|
|
|
|
|
ATG
|
|
|
7,046
|
|
|
|
6,526
|
|
Narrowband
satellite
|
|
|
4,458
|
|
|
|
4,522
|
|
Average monthly
connectivity service revenue per aircraft online
|
|
|
|
|
|
|
ATG
|
|
$
|
3,389
|
|
|
$
|
3,321
|
|
Narrowband
satellite
|
|
|
304
|
|
|
|
235
|
|
Units sold
|
|
|
|
|
|
|
ATG
|
|
|
223
|
|
|
|
246
|
|
Narrowband
satellite
|
|
|
49
|
|
|
|
69
|
|
Average equipment
revenue per unit sold (in thousands)
|
|
|
|
|
|
|
ATG
|
|
$
|
70
|
|
|
$
|
73
|
|
Narrowband
satellite
|
|
|
54
|
|
|
|
46
|
|
- 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.
- Narrowband satellite aircraft online. We define
narrowband 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 narrowband
satellite aircraft online. We define average monthly
connectivity service revenue per narrowband 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 narrowband satellite unit
sold. We define average equipment revenue per narrowband
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 March 31,
|
|
|
%
Change
|
|
|
|
2023
|
|
|
2022
|
|
|
2023 over
2022
|
|
Service
revenue
|
|
$
|
78,499
|
|
|
$
|
70,667
|
|
|
|
11.1
|
%
|
Equipment
revenue
|
|
|
20,098
|
|
|
|
22,083
|
|
|
|
(9.0)
|
%
|
Total
revenue
|
|
$
|
98,597
|
|
|
$
|
92,750
|
|
|
|
6.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
Ended March 31,
|
|
|
%
Change
|
|
|
|
2023
|
|
|
2022
|
|
|
2023 over
2022
|
|
Cost of service revenue
(1)
|
|
$
|
16,797
|
|
|
$
|
14,634
|
|
|
|
14.8
|
%
|
Cost of equipment
revenue (1)
|
|
$
|
18,126
|
|
|
$
|
14,281
|
|
|
|
26.9
|
%
|
|
(1)
Excludes depreciation and amortization expense.
|
Gogo Inc. and
Subsidiaries Reconciliation of GAAP to Non-GAAP
Measures (in thousands, unaudited)
|
|
|
|
For the Three
Months
Ended March 31,
|
|
|
For the Three
Months Ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2022
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stock (GAAP)
|
|
$
|
20,449
|
|
|
$
|
22,196
|
|
|
$
|
27,670
|
|
Interest
expense
|
|
|
8,976
|
|
|
|
10,889
|
|
|
|
9,430
|
|
Interest
income
|
|
|
(1,916)
|
|
|
|
(47)
|
|
|
|
(1,455)
|
|
Income tax
provision
|
|
|
4,388
|
|
|
|
1,937
|
|
|
|
3,039
|
|
Depreciation and
amortization
|
|
|
2,791
|
|
|
|
3,791
|
|
|
|
2,574
|
|
EBITDA
|
|
|
34,688
|
|
|
|
38,766
|
|
|
|
41,258
|
|
Stock-based
compensation expense
|
|
|
5,041
|
|
|
|
4,007
|
|
|
|
4,964
|
|
Adjusted
EBITDA
|
|
$
|
39,729
|
|
|
$
|
42,773
|
|
|
$
|
46,222
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow:
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities (GAAP) (1)
|
|
$
|
18,514
|
|
|
$
|
17,866
|
|
|
$
|
31,466
|
|
Consolidated capital
expenditures (1)
|
|
|
(4,596)
|
|
|
|
(9,055)
|
|
|
|
(9,982)
|
|
Proceeds from interest
rate caps (1)
|
|
|
6,087
|
|
|
|
—
|
|
|
|
3,489
|
|
Free cash
flow
|
|
$
|
20,005
|
|
|
$
|
8,811
|
|
|
$
|
24,973
|
|
|
(1)
See Unaudited Condensed Consolidated Statements of Cash
Flows
|
Gogo Inc. and
Subsidiaries Reconciliation of Estimated Full-Year GAAP
Net Cash Provided by Operating Activities to Non-GAAP
Measures (in millions, unaudited)
|
|
|
FY 2023
Range
|
|
|
Low
|
|
|
High
|
|
Free Cash
Flow:
|
|
|
|
|
|
Net cash provided by
operating activities (GAAP)
|
$
|
85
|
|
|
$
|
105
|
|
Consolidated capital
expenditures
|
|
(30)
|
|
|
|
(40)
|
|
Proceeds from interest
rate caps
|
|
25
|
|
|
|
25
|
|
Free cash
flow
|
$
|
80
|
|
|
$
|
90
|
|
Definition of Non-GAAP Measures
EBITDA represents net income attributable to common stock
before interest expense, interest income, income taxes and
depreciation and amortization expense.
Adjusted EBITDA represents EBITDA adjusted for stock-based
compensation expense. Our management believes that the use of
Adjusted EBITDA eliminates items that management believes have less
bearing on our operating performance, thereby highlighting trends
in our core business which may not otherwise be apparent. It also
provides an assessment of controllable expenses, which are
indicators management uses to determine whether current spending
decisions need to be adjusted in order to meet financial goals and
achieve optimal financial performance.
We believe that the exclusion of stock-based compensation
expense from Adjusted EBITDA provides a clearer view of the
operating performance of our business and is appropriate given that
grants made at a certain price and point in time do not necessarily
reflect how our business is performing at any particular time.
While we believe that investors should have information about any
dilutive effect of outstanding options and the cost of that
compensation, we also believe that stockholders should have the
ability to consider our performance using a non-GAAP financial
measure that excludes these costs and that management uses to
evaluate our business.
We also present Adjusted EBITDA as a supplemental performance
measure because we believe that this measure provides investors,
securities analysts and other users of our consolidated financial
statements with important supplemental information with which to
evaluate our performance and to enable them to assess our
performance on the same basis as management.
Adjusted EBITDA Margin represents Adjusted EBITDA divided by
total revenue. We present Adjusted EBITDA Margin as a supplemental
performance measure because we believe that it provides meaningful
information regarding our operating efficiency.
Free Cash Flow represents net cash provided by operating
activities, plus the proceeds received from our interest rate caps,
less purchases of property and equipment. We believe that Free Cash
Flow provides meaningful information regarding our liquidity.
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SOURCE Gogo Inc.