0001537054false00015370542024-02-282024-02-280001537054us-gaap:PreferredStockMember2024-02-282024-02-280001537054us-gaap:CommonStockMember2024-02-282024-02-28

 

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): February 28, 2024

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 February 28, 2024, Gogo Inc. issued a press release announcing its results of operations for the fourth quarter ended December 31, 2023. 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 February 28, 2024.

104

 

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

 


 

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/ Jessica G. Betjemann

Jessica G. Betjemann
Executive Vice President and

Chief Financial Officer

 

Date: February 28, 2024

 


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 Fourth Quarter and 2023 Results

 

Provides 2024 Financial Guidance and Updates Long-Term Targets

Total Revenue of $97.8 million, down 10% Year-over-Year; Record Fourth Quarter Service Revenue of $80.9 million, up 5% Year-over-Year

 

Q4 Net Income of $14.5 million; Adjusted EBITDA(1) of $35.1 million

 

BROOMFIELD, CO - February 28, 2024 – 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 December 31, 2023.

Q4 2023 Highlights

Total revenue of $97.8 million decreased 10% compared to Q4 2022.
o
Record service revenue of $80.9 million increased 5% compared to Q4 2022 and 2% compared to Q3 2023.
o
Equipment revenue of $16.9 million decreased 45% compared to Q4 2022 and decreased 8% compared to Q3 2023.
AVANCE equipment units shipped totaled 202, a decrease of 48% compared to Q4 2022 and an increase of 5% compared to Q3 2023.
Total ATG aircraft online (“AOL”) reached 7,205, an increase of 4% compared to Q4 2022 and an increase of 1% compared to Q3 2023.
Total AVANCE AOL grew to 3,976, an increase of 21% compared to Q4 2022 and 5% compared to Q3 2023. AVANCE units comprised approximately 55% of total AOL as of December 31, 2023, up from 47% as of December 31, 2022.
o
Average Monthly Revenue per ATG aircraft online (“ARPU”) of $3,387, compared to $3,370 in Q4 2022 and $3,373 in Q3 2023.
Net income of $14.5 million decreased 48% from $27.7 million in Q4 2022.
o
Diluted earnings per share was $0.11 compared to $0.21 in Q4 2022.
Adjusted EBITDA(1) of $35.1 million, which includes approximately $1.9 million of operating expenses related to Gogo Galileo, decreased 24% compared to Q4 2022 and 19% compared to Q3 2023.
Cash provided by operating activities of $26.2 million in Q4 2023 decreased from $31.5 million in the prior year period.
o
Record Free Cash Flow(1) of $28.4 million in Q4 2023, an increase from $25.0 million in the prior-year period.
o
Cash, cash equivalents and short-term investments totaled $139.0 million as of December 31, 2023 compared to $110.8 million as of September 30, 2023.

1

 


 

In Q4 2023, the Company repurchased approximately 480,000 shares for a total cost of approximately $4.8 million. In January, the Company repurchased approximately 566,000 shares for a total cost of approximately $5.2 million.
Gogo signed a new 10-year connectivity agreement with NetJets.

Full Year 2023 Highlights

Total revenue of $397.6 million decreased 2% compared to 2022.
o
Record service revenue of $318.0 million increased 7% compared to 2022.
o
Equipment revenue of $79.6 million decreased 26% compared to 2022.
ARPU of $3,380 increased 1% compared to 2022.
Net income increased to $145.7 million compared to $92.1 million in 2022. The 2023 fiscal year includes a $48.1 million tax benefit.
Adjusted EBITDA(1) of $162.1 million decreased 7% compared to 2022.
Cash provided by operating activities decreased to $79.0 million compared to $103.4 million in 2022.
Free Cash Flow(1) increased to $82.7 million compared to $57.8 million in 2022.

 

“The launches of Gogo Galileo and Gogo 5G later this year will provide order-of-magnitude improvements in the network speeds we deliver to customers and significantly increase our global total addressable market,” said Oakleigh Thorne, Chairman and CEO. “And our LTE replacement program will drive conversion of our Classic product customers to our AVANCE platform, which will provide them with easy upgrade pathways to 5G and Galileo in the future.”

 

"Gogo’s ability to reiterate its $150 million to $200 million Free Cash Flow target in 2025 and target long-term revenue growth of approximately 15-17% from 2023-2028 is supported by our upcoming product roll outs, Gogo Galileo and Gogo 5G,” said Jessi Betjemann, Executive Vice President and CFO. "Gogo’s strategic investments will decline significantly after 2024, allowing for further flexibility for the return of capital to shareholders.”

 

2024 Financial Guidance and Long-Term Financial Targets

The Company provides the following guidance for 2024, which includes the impact of the Federal Communications Commission's Secure and Trusted Communications Networks Reimbursement Program ("FCC Reimbursement Program").

Total revenue in the range of $410 million to $425 million.
Adjusted EBITDA(1) in the range of $110 million to $125 million reflecting operating expenses of approximately $40 million for strategic and operational initiatives including Gogo 5G and Gogo Galileo and $4 million in legal expenses tied to the SmartSky litigation.
Free Cash Flow(1) in the range of $20 million to $40 million, which includes $45 million in reimbursements tied to the FCC Reimbursement Program.
Capital expenditures of approximately $45 million including $25 million for strategic initiatives including Gogo 5G, Gogo Galileo and the LTE network build.

The Company provides the following long-term financial targets:

Revenue growth at a compound annual growth rate of approximately 15%-17% from 2023 through 2028 versus the prior target of 15-17% from 2022 through 2027. The Company continues to expect that Gogo Galileo will contribute revenue beginning in 2025.

2

 


 

Annual Adjusted EBITDA Margin(1) reaching 40% in 2028 versus the prior target in the mid-40% range in 2027.
Reiterates Free Cash Flow(1) in the range of $150 million to $200 million in 2025, without the effect of the FCC Reimbursement program.

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

 

Conference Call

 

The Company will host its fourth quarter conference call on February 28, 2024 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 use the below link to retrieve your unique conference ID to use to access the earnings call.

 

https://register.vevent.com/register/BI3011162f8c914b139642ae3b02fcf993

 

 

 

Non-GAAP Financial Measures

We report certain non-GAAP financial measurements, including Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow in the discussion 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 2024, Adjusted EBITDA Margin for fiscal 2028 or 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, due to high variability and complexity with respect to estimating certain forward-looking amounts, 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

3

 


 

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 inflationary trends; 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, 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, Gogo Galileo 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 communication networks, and the internet; our possession and use of personal information; risks associated with participation in the FCC Reimbursement 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;

our ability to obtain additional financing to refinance or repay our existing indebtedness; the impact of restrictions and limitations in the agreements and instruments governing our debt; the impact of increases in interest rates; the impact of a substantial portion of our indebtedness being secured by substantially all of our assets; the impact of a downgrade, suspension or withdrawal of the rating assigned by a rating agency; the volatility of our stock price; our ability to fully utilize our tax losses; the dilutive impact of future stock issuances; the impact of our stockholder concentration and of our CEO and Chair of the Board being a significant stockholder; our ability to fulfill our obligations associated with being a public company; and the impact of anti-takeover provisions, ownership provisions and certain other provisions in our charter, our bylaws, Delaware law, and our existing and any future credit facilities.

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, 2023 as filed with the Securities and Exchange Commission (“SEC”) on February 28, 2024 and in our subsequent quarterly reports on Form 10-Q as filed with the SEC.

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 December 31, 2023, Gogo reported 3,976 business aircraft flying with Gogo’s AVANCE L5 or L3 system installed, 7,205 aircraft flying with its broadband ATG systems onboard, and 4,341 aircraft with narrowband satellite connectivity installed. Connect with us at business.gogoair.com.

Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

 

 

For the Three Months
Ended December 31,

 

 

For the Years
Ended December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Service revenue

 

$

80,908

 

 

$

77,346

 

 

$

318,015

 

 

$

296,329

 

Equipment revenue

 

 

16,902

 

 

 

30,817

 

 

 

79,562

 

 

 

107,738

 

Total revenue

 

 

97,810

 

 

 

108,163

 

 

 

397,577

 

 

 

404,067

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of service revenue (exclusive of items shown below)

 

 

17,836

 

 

 

16,744

 

 

 

69,568

 

 

 

64,427

 

Cost of equipment revenue (exclusive of items shown below)

 

 

15,400

 

 

 

21,063

 

 

 

63,383

 

 

 

71,473

 

Engineering, design and development

 

 

10,424

 

 

 

8,241

 

 

 

36,683

 

 

 

29,587

 

Sales and marketing

 

 

8,049

 

 

 

6,932

 

 

 

29,797

 

 

 

25,471

 

General and administrative

 

 

16,546

 

 

 

13,914

 

 

 

57,280

 

 

 

58,203

 

Depreciation and amortization

 

 

4,679

 

 

 

2,574

 

 

 

16,701

 

 

 

12,580

 

Total operating expenses

 

 

72,934

 

 

 

69,468

 

 

 

273,412

 

 

 

261,741

 

Operating income

 

 

24,876

 

 

 

38,695

 

 

 

124,165

 

 

 

142,326

 

Other expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(1,894

)

 

 

(1,455

)

 

 

(7,403

)

 

 

(2,386

)

Interest expense

 

 

8,249

 

 

 

9,430

 

 

 

33,056

 

 

 

38,872

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

2,224

 

 

 

 

Other (income) expense, net

 

 

(582

)

 

 

11

 

 

 

(1,315

)

 

 

123

 

Total other expense

 

 

5,773

 

 

 

7,986

 

 

 

26,562

 

 

 

36,609

 

Income before income taxes

 

 

19,103

 

 

 

30,709

 

 

 

97,603

 

 

 

105,717

 

Income tax (benefit) provision

 

 

4,636

 

 

 

3,039

 

 

 

(48,075

)

 

 

13,658

 

Net income

 

$

14,467

 

 

$

27,670

 

 

$

145,678

 

 

$

92,059

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stock per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.11

 

 

$

0.22

 

 

$

1.12

 

 

$

0.75

 

Diluted

 

$

0.11

 

 

$

0.21

 

 

$

1.09

 

 

$

0.71

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

130,061

 

 

 

128,447

 

 

 

129,753

 

 

 

123,268

 

Diluted

 

 

132,931

 

 

 

133,053

 

 

 

133,283

 

 

 

133,923

 

 

 

 

5

 


 

Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

139,036

 

 

$

150,550

 

Short-term investments

 

 

-

 

 

 

24,796

 

Total cash, cash-equivalents and short-term investments

 

 

139,036

 

 

 

175,346

 

Accounts receivable, net of allowances of $2,091 and $1,778, respectively

 

 

48,233

 

 

 

54,210

 

Inventories

 

 

63,187

 

 

 

49,493

 

Prepaid expenses and other current assets

 

 

64,138

 

 

 

45,100

 

Total current assets

 

 

314,594

 

 

 

324,149

 

Non-current assets:

 

 

 

 

 

 

Property and equipment, net

 

 

98,129

 

 

 

104,595

 

Intangible assets, net

 

 

55,647

 

 

 

49,509

 

Operating lease right-of-use assets

 

 

70,552

 

 

 

75,261

 

Other non-current assets, net of allowances of $591 and $501, respectively

 

 

25,979

 

 

 

43,355

 

Deferred income taxes

 

 

216,638

 

 

 

162,657

 

Total non-current assets

 

 

466,945

 

 

 

435,377

 

Total assets

 

$

781,539

 

 

$

759,526

 

Liabilities and stockholders’ equity (deficit)

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

16,094

 

 

$

13,646

 

Accrued liabilities

 

 

47,649

 

 

 

60,056

 

Deferred revenue

 

 

1,003

 

 

 

3,418

 

Current portion of long-term debt

 

 

7,250

 

 

 

7,250

 

Total current liabilities

 

 

71,996

 

 

 

84,370

 

Non-current liabilities:

 

 

 

 

 

 

Long-term debt

 

 

587,501

 

 

 

690,173

 

Non-current operating lease liabilities

 

 

73,047

 

 

 

79,241

 

Other non-current liabilities

 

 

8,270

 

 

 

7,611

 

Total non-current liabilities

 

 

668,818

 

 

 

777,025

 

Total liabilities

 

 

740,814

 

 

 

861,395

 

Stockholders’ equity (deficit)

 

 

 

 

 

 

Common stock

 

 

14

 

 

 

14

 

Additional paid-in capital

 

 

1,402,003

 

 

 

1,385,933

 

Accumulated other comprehensive income

 

 

15,796

 

 

 

30,128

 

Treasury stock, at cost

 

 

(163,197

)

 

 

(158,375

)

Accumulated deficit

 

 

(1,213,891

)

 

 

(1,359,569

)

Total stockholders’ equity (deficit)

 

 

40,725

 

 

 

(101,869

)

Total liabilities and stockholders’ equity (deficit)

 

$

781,539

 

 

$

759,526

 

 

 

6

 


 

Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

For the Years
Ended December 31,

 

 

 

2023

 

 

2022

 

Operating activities:

 

 

 

 

 

 

Net income

 

$

145,678

 

 

$

92,059

 

Adjustments to reconcile net income to cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

16,701

 

 

 

12,580

 

Loss on asset disposals, abandonments and write-downs

 

 

362

 

 

 

1,577

 

Provision for expected credit losses

 

 

1,233

 

 

 

1,047

 

Deferred income taxes

 

 

(49,172

)

 

 

13,170

 

Stock-based compensation expense

 

 

21,288

 

 

 

19,065

 

Amortization of deferred financing costs and interest rate caps

 

 

3,894

 

 

 

3,215

 

Accretion of debt discount

 

 

403

 

 

 

456

 

Gain on sale of equity investment

 

 

(1,343

)

 

 

 

Loss on extinguishment of debt

 

 

2,224

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

4,833

 

 

 

(17,482

)

Inventories

 

 

(13,694

)

 

 

(15,517

)

Prepaid expenses and other current assets

 

 

(49,891

)

 

 

8,351

 

Contract assets

 

 

3,217

 

 

 

(2,164

)

Accounts payable

 

 

3,658

 

 

 

(2,540

)

Accrued liabilities

 

 

4,351

 

 

 

(12,031

)

Deferred revenue

 

 

(2,411

)

 

 

1,589

 

Accrued interest

 

 

(9,409

)

 

 

3,647

 

Other non-current assets and liabilities

 

 

(2,952

)

 

 

(3,617

)

Net cash provided by operating activities

 

 

78,970

 

 

 

103,405

 

Investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(16,267

)

 

 

(43,914

)

Acquisition of intangible assets—capitalized software

 

 

(7,821

)

 

 

(6,000

)

Proceeds from FCC Reimbursement Program for property, equipment and intangibles

 

 

1,130

 

 

 

 

Proceeds from interest rate caps

 

 

26,675

 

 

 

4,292

 

Redemptions of short-term investments

 

 

74,179

 

 

 

 

Purchases of short-term investments

 

 

(49,383

)

 

 

(24,796

)

Purchase of equity investment

 

 

(5,000

)

 

 

 

Proceeds from sale of equity investment

 

 

6,343

 

 

 

 

Net cash provided by (used in) investing activities

 

 

29,856

 

 

 

(70,418

)

Financing activities:

 

 

 

 

 

 

Repurchases of common stock

 

 

(4,822

)

 

 

(18,375

)

Payments on term loan

 

 

(107,250

)

 

 

(7,250

)

Payments on finance leases

 

 

(132

)

 

 

(184

)

Stock-based compensation activity

 

 

(8,230

)

 

 

(2,579

)

Net cash used in financing activities

 

 

(120,434

)

 

 

(28,388

)

Effect of foreign exchange rate changes on cash

 

 

94

 

 

 

13

 

(Decrease) increase in cash, cash equivalents and restricted cash

 

 

(11,514

)

 

 

4,612

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

150,880

 

 

 

146,268

 

Cash, cash equivalents and restricted cash at end of period

 

$

139,366

 

 

$

150,880

 

Cash, cash equivalents and restricted cash at end of period

 

$

139,366

 

 

$

150,880

 

Less: current restricted cash

 

 

 

 

 

 

Less: non-current restricted cash

 

 

330

 

 

 

330

 

Cash and cash equivalents at end of period

 

$

139,036

 

 

$

150,550

 

Supplemental cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

68,145

 

 

$

41,209

 

Cash paid for taxes

 

 

1,004

 

 

 

377

 

Non-cash investing activities:

 

 

 

 

 

 

Purchases of property and equipment in current liabilities

 

$

4,801

 

 

$

10,688

 

 

7

 


 

Gogo Inc. and Subsidiaries

Supplemental Information – Key Operating Metrics

 

 

For the Three Months
Ended December 31,

 

 

For the Years
Ended December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Aircraft online (at period end)

 

 

 

 

 

 

 

 

 

 

 

 

ATG AVANCE

 

 

3,976

 

 

 

3,279

 

 

 

3,976

 

 

 

3,279

 

Gogo Biz

 

 

3,229

 

 

 

3,656

 

 

 

3,229

 

 

 

3,656

 

Total ATG

 

 

7,205

 

 

 

6,935

 

 

 

7,205

 

 

 

6,935

 

Narrowband satellite

 

 

4,341

 

 

 

4,475

 

 

 

4,341

 

 

 

4,475

 

Average monthly connectivity service revenue per aircraft online

 

 

 

 

 

 

 

 

 

 

 

 

ATG

 

$

3,387

 

 

$

3,370

 

 

$

3,380

 

 

$

3,349

 

Narrowband satellite

 

 

301

 

 

 

284

 

 

 

298

 

 

 

268

 

Units sold

 

 

 

 

 

 

 

 

 

 

 

 

ATG

 

 

202

 

 

 

390

 

 

 

894

 

 

 

1,334

 

Narrowband satellite

 

 

42

 

 

 

62

 

 

 

174

 

 

 

206

 

Average equipment revenue per unit sold (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

ATG

 

$

69

 

 

$

67

 

 

$

72

 

 

$

68

 

Narrowband satellite

 

 

38

 

 

 

44

 

 

 

46

 

 

 

49

 

 

ATG AVANCE aircraft online. We define ATG AVANCE aircraft online as the total number of business aircraft equipped with our AVANCE L5 or L3 system for which we provide ATG services as of the last day of each period presented.
Gogo Biz aircraft online. We define Gogo Biz aircraft online as the total number of business aircraft not equipped with our AVANCE L5 or L3 system for which we provide ATG services as of the last day of each period presented. This number excludes commercial aircraft operated by Intelsat’s airline customers receiving ATG service.
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.

 

 

 

 

 

 

 

 

 

8

 


 

Gogo Inc. and Subsidiaries

Supplemental Information – Revenue and Cost of Revenue

(in thousands, unaudited)

 

 

For the Three Months
Ended December 31,

 

 

% Change

 

 

For the Years
Ended December 31,

 

 

% Change

 

 

 

2023

 

 

2022

 

 

2023 over 2022

 

 

2023

 

 

2022

 

 

2023 over 2022

 

Service revenue

 

$

80,908

 

 

$

77,346

 

 

 

4.6

%

 

$

318,015

 

 

$

296,329

 

 

 

7.3

%

Equipment revenue

 

 

16,902

 

 

 

30,817

 

 

 

(45.2

)%

 

 

79,562

 

 

 

107,738

 

 

 

(26.2

)%

Total revenue

 

$

97,810

 

 

$

108,163

 

 

 

(9.6

)%

 

$

397,577

 

 

$

404,067

 

 

 

(1.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months
Ended December 31,

 

 

% Change

 

 

For the Years
Ended December 31,

 

 

% Change

 

 

 

2023

 

 

2022

 

 

2023 over 2022

 

 

2023

 

 

2022

 

 

2023 over 2022

 

Cost of service revenue (1)

 

$

17,836

 

 

$

16,744

 

 

 

6.5

%

 

$

69,568

 

 

$

64,427

 

 

 

8.0

%

Cost of equipment revenue (1)

 

$

15,400

 

 

$

21,063

 

 

 

(26.9

)%

 

$

63,383

 

 

$

71,473

 

 

 

(11.3

)%

 

(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 December 31,

 

 

For the Years
Ended December 31,

 

 

For the Three Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stock (GAAP)

 

$

14,467

 

 

$

27,670

 

 

$

145,678

 

 

$

92,059

 

 

$

20,913

 

Interest expense

 

 

8,249

 

 

 

9,430

 

 

 

33,056

 

 

 

38,872

 

 

 

8,025

 

Interest income

 

 

(1,894

)

 

 

(1,455

)

 

 

(7,403

)

 

 

(2,386

)

 

 

(1,622

)

Income tax provision (benefit)

 

 

4,636

 

 

 

3,039

 

 

 

(48,075

)

 

 

13,658

 

 

 

6,728

 

Depreciation and amortization

 

 

4,679

 

 

 

2,574

 

 

 

16,701

 

 

 

12,580

 

 

 

4,692

 

EBITDA

 

 

30,137

 

 

 

41,258

 

 

 

139,957

 

 

 

154,783

 

 

 

38,736

 

Stock-based compensation expense

 

 

5,559

 

 

 

4,964

 

 

 

21,288

 

 

 

19,065

 

 

 

5,235

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

2,224

 

 

 

 

 

 

 

Gain on sale of equity investment

 

 

(570

)

 

 

 

 

 

(1,343

)

 

 

 

 

 

(773

)

Adjusted EBITDA

 

$

35,126

 

 

$

46,222

 

 

$

162,126

 

 

$

173,848

 

 

$

43,198

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free Cash Flow:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities (GAAP) (1)

 

$

26,152

 

 

$

31,466

 

 

$

78,970

 

 

$

103,405

 

 

$

18,677

 

Consolidated capital expenditures (1)

 

 

(5,371

)

 

 

(9,982

)

 

 

(24,088

)

 

 

(49,914

)

 

 

(5,355

)

Proceeds from FCC Reimbursement Program for property, equipment and intangibles (1)

 

 

1,127

 

 

 

 

 

 

1,130

 

 

 

 

 

 

3

 

Proceeds from interest rate caps (1)

 

 

6,510

 

 

 

3,489

 

 

 

26,675

 

 

 

4,292

 

 

 

7,676

 

Free cash flow

 

$

28,418

 

 

$

24,973

 

 

$

82,687

 

 

$

57,783

 

 

$

21,001

 

 

(1)
See Unaudited Condensed Consolidated Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 


 

Gogo Inc. and Subsidiaries

Reconciliation of Estimated Full-Year GAAP Net Cash

Provided by Operating Activities to Non-GAAP Measures

(in millions, unaudited)

 

FY 2024 Range

 

 

Low

 

 

High

 

Free Cash Flow:

 

 

 

 

 

Net cash provided by operating activities (GAAP)

$

37

 

 

$

57

 

Consolidated capital expenditures

 

(45

)

 

 

(45

)

Proceeds from FCC Reimbursement Program for property, equipment and intangibles

 

8

 

 

 

8

 

Proceeds from interest rate caps

 

20

 

 

 

20

 

Free cash flow

$

20

 

 

$

40

 


 

 

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 (i) stock-based compensation expense, (ii) loss on extinguishment of debt and (iii) gain on sale of equity investment . 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 believe it is useful for an understanding of our operating performance to exclude the gain on sale of equity investment from Adjusted EBITDA because this activity is not related to our operating performance.

We believe it is useful for an understanding of our operating performance to exclude the loss on extinguishment of debt from Adjusted EBITDA because of the infrequently occurring nature of this activity.

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 the FCC Reimbursement Program and the interest rate caps, less purchases of property and equipment and the acquisition of intangible assets. We believe that Free Cash Flow provides meaningful information regarding our liquidity. Management believes that Free Cash Flow is useful for investors because it provides them with an important perspective on the cash available for strategic measures, after making necessary capital investments in property and equipment to support the Company’s ongoing business operations and provides them with the same measures that management uses as the basis of making capital allocation decisions.

 

10

 


v3.24.0.1
Document And Entity Information
Feb. 28, 2024
Document Information [Line Items]  
Document Type 8-K
Amendment Flag false
Document Period End Date Feb. 28, 2024
Entity Registrant Name GOGO INC.
Entity Central Index Key 0001537054
Entity Emerging Growth Company false
Securities Act File Number 001-35975
Entity Incorporation, State or Country Code DE
Entity Tax Identification Number 27-1650905
Entity Address, Address Line One 105 Edgeview Dr.
Entity Address, Address Line Two Suite 300
Entity Address, City or Town Broomfield
Entity Address, Country CO
Entity Address, Postal Zip Code 80021
City Area Code 303
Local Phone Number 301-3271
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Common Stock [Member]  
Document Information [Line Items]  
Title of 12(b) Security Common stock, par value $0.0001 per share
Trading Symbol GOGO
Security Exchange Name NASDAQ
Preferred Stock [Member]  
Document Information [Line Items]  
Title of 12(b) Security Preferred Stock Purchase Rights
Trading Symbol GOGO
Security Exchange Name NASDAQ

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