2016 Gogo Annual Report 2016 the 2Ku Antenna
Total Page：16
File Type：pdf, Size：1020Kb
2016 Annual report Gogo Annual report 2016 The 2Ku antenna The era of bandwidth abundance 2016 marked the 2Ku starts the era of bandwidth abundance, transforming the passenger experience, connecting commercial debut of everyone on the plane, and enabling airlines to ® Gogo 2Ku, our proprietary realize the benefits of the connected aircraft. global satellite solution This next generation and proprietary global satellite solution leads the industry based on its cost, coverage, capacity, and reliability performance metrics. More than a dozen of the world’s leading airlines have selected the solution, adding more than 1,500 aircraft to our 2Ku awards. We are thrilled 150 2Ku installs* 24 2Ku install lines* 3 Days to install 2Ku* *Approximations as of 3/31/2017. to offer this next generation in-flight connectivity global operations capabilities to reduce the time an technology to a global aviation market that is largely aircraft is out of service. In addition, we are making untapped outside of North America. strong progress to achieve installations at OEMs such as Airbus, Boeing, and Bombardier. This means that Gogo has developed industry-leading installation the aircraft manufacturers will equip aircraft with our capabilities built on our decade long experience 2Ku connectivity system before delivery to an airline, installing or materially upgrading hardware on simplifying the process for our partners. thousands of commercial aircraft. As we ramp up our installation capabilities, we are focused on shortening the installation time and establishing Invest in network technologies Gogo continues to disrupt and bring best-in-class connectivity technologies to aviation Gogo uniquely specializes in designing and developing platform enables us to obtain bandwidth from in-flight connectivity solutions for commercial both current and future satellite constellations and business aircraft. In the past 25 years, Gogo without the need for antenna swaps or other introduced nine network technologies – six of which invasive changes to an aircraft. As a result, are proprietary to Gogo – that have brought more 2Ku will be able to seamlessly take advantage bandwidth and coverage to aviation. of future satellite innovations to meet the growing bandwidth consumption needs of our aviation Our industry-leading technologies disrupt the partners and their passengers. market, and we continue to make them better. Within a year of 2Ku’s commercial launch, we will In September of 2016, we announced plans to launch increase its speeds from 25 Mbps to 100 Mbps our next generation air-to-ground (ATG) solution, and are working to push this higher. One of the increasing network speeds ten-fold to 100 Mbps. key features of 2Ku is that its open architecture This cost-effective enhancement leverages our existing Next generation ATG antenna investments in ground infrastructure and offers all of ATG’s core benefits including low latency, low cost, and overnight installation. Next generation ATG, expected to launch in 2018, will bring unrivaled performance to larger business aircraft in North America and regional commercial jets as well. As our next generation global and regional network solutions hit the market, we are already looking ahead to the next wave of innovations. Our aviation partners can rest assured that Gogo is hard at work to bring them not only more bandwidth, but also the best network solutions to keep them at the forefront of in-flight connectivity. 2Ku aircraft 1,000 awards in 2016* Total 2Ku 1,500 aircraft awards* commercial 3,000 aircraft online* BA broadband 4,200 aircraft online* *Approximations as of 12/31/2016. Expand footprint New deals expand our reach In 2017, we plan to commence 2Ku installations on numerous international partners, including and bolster our position in Air Canada, Air France-KLM, British Airways, and the global aviation industry Iberia. As we scale our global operations, we will also continue to focus on winning more aircraft We are committed to providing the best aircraft around the world. With nearly 10,000 commercial connectivity products and services to the global aircraft today without connectivity and new aircraft aviation industry. As the leading global provider deliveries every year, we are excited about the of in-flight broadband connectivity, we continue opportunity to grow our business. to invest in operations and ongoing research and development. Today, nearly 3,000 commercial In business aviation, we continued our success aircraft and 4,200 business aircraft operate during the year with another 700 ATG installations. on our networks across the globe with With less than 25% of the 20,000 business aircraft operations on five continents. in North America connected today, we have a great opportunity to grow our aircraft online even further for many years to come. Dear shareholders 2016 was transformational These accomplishments are at the core of our mission to provide the best connectivity for Gogo and a year that will products and services to our aviation partners. have a long-lasting impact They also signal that Gogo is moving from a period on in-flight connectivity of significant bandwidth constraint to an era of bandwidth abundance. More bandwidth is the key to better experiences for our airline partners and their During the year, we commercially launched passengers and is fundamental to our continued Gogo 2Ku, our proprietary global satellite solution, revenue growth and profitability. And with more on nearly 100 aircraft and announced plans to than 1,500 commercial aircraft awarded for 2Ku deploy our next generation ATG network. installation, we are off to a great start. At the end of 2016, we had nearly 3,000 global Entering the era of commercial aircraft and 4,200 business aircraft bandwidth abundance flying with our network solutions. In 2017, we will Gogo 2Ku enables us to transform the passenger be focused on installing 2Ku on approximately 450 experience by offering streaming-class service. to 550 commercial aircraft, which will significantly Bandwidth abundance means everyone on the plane improve the passenger experience for our North will be able to stay connected and our airline partners American airline partners and launch connectivity will be able to use connectivity for their own operational service for our new international airline partners. needs. More bandwidth on the aircraft will result in We will also install hundreds of business jets with both a better passenger experience and rapid average our ATG broadband service. revenue per aircraft (ARPA) growth. That is why we are accelerating 2Ku installations. Gogo’s industry leadership position is a testament to our more than 1,000 employees. We made major 2Ku’s industry-leading performance is already on strides in advancing aviation in 2016. We also reported display and has been demonstrated on nearly forty record financial results with revenue of $597 million, thousand flights, as far north as Alaska and as far up 19% from the prior year, and adjusted EBITDA of south as the tip of South America. In 2016, we were $67 million, up 83% from the prior year. I am grateful awarded more than 1,000 aircraft by several of the for our employees’ continued hard work as we move world’s leading airlines including Air Canada, Gogo and the industry forward. Air France, American, British Airways, Delta, and KLM. COMPANY REVENUE ($M) ADJUSTED EBITDA ($M)* Note: Minor differences exist due to rounding *A reconciliation of Adjusted EBITDA to net income for 2011–2016 can be found in the back of this annual report. Gogo’s network operations center We will capitalize on this momentum in 2017 by we will fully embed this industry leading technology focusing on the large opportunity that exists outside in the aviation ecosystem for many years to come, of North America, where nearly 10,000 commercial making it easy for our airline partners to select 2Ku. aircraft are not yet connected. We built 2Ku with a simple premise – to provide the While we continue to build our 2Ku awards, best cost, coverage, capacity, and reliability to our we are also driving more rapid deployment of aviation partners around the globe. And in order to the technology. We are now able to install 2Ku in future-proof the connectivity technology decision of three days – an industry best for satellite technology our airline partners, we created 2Ku with an open installation – and will continue to focus on reducing architecture which enables us to take advantage installation times in order to lower costs and of satellite industry innovations resulting in more reduce the time aircraft are out of service. bandwidth at a lower cost in the future. Our first 2Ku With growing capabilities to certify and install installs in 2016 enabled speeds in excess of 25 Mbps aircraft in the aftermarket as well as at the factory, to the aircraft. In 2017, that same 2Ku is expected to deliver speeds in excess of 100 Mbps to the aircraft, Looking ahead driven by software upgrades, the introduction of With innovative network technologies, increasing our new proprietary modem, and the availability global operating capabilities, and customizable of high-throughput satellites. aviation-centric platforms and services, Gogo is well positioned to continue to deliver increasing Driving innovation value to the global aviation industry. We are set to While 2Ku is transformative for our industry, our drive revenue, profitability, and free cash flow innovation does not stop there. In 2016, we announced growth in the years ahead. the development of a next generation ATG technology that we expect to launch in 2018 and that will increase To all of my Gogo colleagues, I want to congratulate speeds on our ATG network to 100 Mbps. you on our many accomplishments in 2016. I’d also like to thank our airline partners and business aviation Our ATG network spans the continental United States customers for their business and our shareholders for and Canada and serves roughly 7,000 aircraft today their continued support of Gogo.