Spread the love
Post Views: 1

Gogo Inc. (“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, 2022.

Q1 2022 Highlights
  • Record total revenue of $92.8 million increased 26% compared to Q1 2021 fueled by strong growth in both service and equipment revenue.
    • Record service revenue of $70.7 million increased 19% compared to Q1 2021 and 2% compared to Q4 2021.
    • Equipment revenue of $22.1 million increased 52% compared to Q1 2021 and decreased 4% compared to Q4 2021.
  • Total ATG aircraft online (“AOL”) reached 6,526, an increase of 11% compared to Q1 2021 and 2% compared to Q4 2021.
    • Total AVANCE units online grew to 2,699, an increase of 42% compared to Q1 2021 and 8% compared to Q4 2021. AVANCE units comprised more than 41% of total AOL as of March 31, 2022, up from 32% as of March 31, 2021.
  • Average Monthly Revenue per ATG aircraft online (“ARPU”) of $3,321 increased 8% compared to Q1 2021 and 1% compared to Q4 2021.
  • Net income from continuing operations increased to $22.2 million from a net loss of $5.9 million in Q1 2021, primarily due to lower interest expense and higher operating income compared to the prior year period, as well as a loss on settlement of convertible notes of $4.4 million recognized in Q1 2021.
    • Basic earnings per share from continuing operations was $0.20. Diluted earnings per share from continuing operations was $0.18.
  • Record Adjusted EBITDA(1) of $42.8 million increased 26% compared to Q1 2021 and 8% compared to Q4 2021.
  • Cash provided by operating activities from continuing operations of $17.9 million in Q1 2022 decreased from $24.6 million in the prior year period primarily due to the timing of interest payments.
    • Free Cash Flow(1) was $8.8 million compared to $23.9 million in the prior year period due to the timing of interest payments and an increase in capital expenditures primarily tied to Gogo 5G.
    • Cash and cash equivalents totaled $152.8 million as of March 31, 2022 compared to $145.9 million as of December 31, 2021.

“Given the continued unprecedented demand for connectivity in business aviation coupled with the strong performance of our supply chain management team, we have increased our projection for ATG equipment unit shipments to 1,300 in 2022, up nearly 50% year over year versus prior expectations for 25% growth,” said Oakleigh Thorne, Chairman and CEO of Gogo.  “We remain on track for commercial deployment of our 5G ATG network in the second half of 2022.”
“Strong first quarter results and our increased 2022 guidance provide a solid foundation for generating significant Free Cash Flow growth in 2023 and beyond,” said Barry Rowan, Gogo’s Executive Vice President and CFO.  “Our financial performance and continued de-leveraging also create the flexibility for strategic investments to further enhance our growth and return of capital to shareholders over time.”

Updated 2022 Financial Guidance

The Company updates its guidance for 2022 as follows:

  • Total revenue in the range of $390 million to $400 million versus prior guidance of $380 million to $395 million
  • Adjusted EBITDA(1) at the high end of the previously guided range of $150 million to $160 million, which includes $5 million of estimated litigation expenses
  • Free Cash Flow(1) of $35 million to $45 million versus prior guidance of $25 million to $45 million, which includes capital expenditures of approximately $65 million, with approximately $50 million of the capital expenditures tied to Gogo 5G
Long-Term Financial Targets

The Company reiterates its baseline long-term targets as follows:

  • Revenue growth at a compound annual growth rate of approximately 15% from 2021 through 2026
  • Annual Adjusted EBITDA Margin(1) approaching 50% in 2026, up from the low 40%’s in 2022 and 2023
  • Free Cash Flow(1) of approximately $125 million in 2023 following the deployment of the Gogo 5G network in 2022, increasing to over $200 million beginning in 2025

The Company’s 2022 guidance and long-term targets are derived from the Company’s baseline forecast and long-term plan and include planned investments in Gogo 5G but do not include potential strategic investments currently under consideration (including a global broadband initiative).

Conference Call

The Company will host its first quarter conference call on May 5, 2022 at 8:30 a.m. ET. A live webcast of the conference call, as well as a replay, will be available online on the Investor Relations section of the Company’s website at http://ir.gogoair.com. Participants can access the call by dialing (844) 464-3940 (within the United States and Canada) or (765) 507-2646 (international dialers) and entering conference ID number: 3438308

Non-GAAP Financial Measures

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