Gogo(GOGO)2021-08-06 00:04Financial Data and Key Metrics Changes - Gogo reported total revenue of $82.4 million for Q2 2021, representing a 51% increase year-over-year and a 16% increase compared to Q2 2019 [7][40] - Adjusted EBITDA reached $36.7 million, a 70% increase from Q2 2020 and an 8% increase sequentially from Q1 2021 [11][54] - Service revenue was $64.8 million, up 47% year-over-year and 18% from Q2 2019 [40] - Average Revenue Per User (ARPU) hit $3,296, reflecting a 28% year-over-year growth [42] Business Line Data and Key Metrics Changes - The number of ATG aircraft online (AOL) reached 6,036, up nearly 12% year-over-year [41] - AVANCE units online grew 51% year-over-year to 2,067, comprising over 34% of total ATG aircraft online [44] - Equipment revenue was $17.6 million, a 66% increase year-over-year, driven by demand for AVANCE L5 and L3 units [40][44] Market Data and Key Metrics Changes - Flight activity for Gogo-equipped aircraft was 13% above pre-pandemic levels in Q2 2021, with significant growth across all segments [12][13] - Data consumption increased by 52% compared to Q2 2019, driven by a 26% increase in megabytes per flight hour [15][16] - The demand for new aircraft is rising, with Gulfstream reporting a book-to-bill ratio of 2.1 in Q2 2021 [14][15] Company Strategy and Development Direction - Gogo is focused on enhancing its ATG network and deploying a 5G network in the second half of 2022 [27][29] - The company aims to layer new products and services on top of the AVANCE platform to drive incremental revenue [28][32] - Gogo is well-positioned to leverage partnerships with LEO satellite companies to enhance its service offerings [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued growth of the business aviation market, with expectations for service revenue to grow approximately 20% in 2021 [35][59] - The company anticipates achieving sustainable positive net income beginning in Q3 2021 [54] - Gogo's stock is viewed as undervalued, with expectations for significant free cash flow growth post-2022 [36][62] Other Important Information - Gogo's liquidity position is strong, with $109.2 million in cash and no draws on its $100 million revolver as of June 30, 2021 [55] - The company has a robust backlog of equipment orders, which supports its revenue guidance for 2021 [45][46] - Gogo plans to allocate approximately $10 million in cash for additional inventory purchases during 2022 to meet demand [47] Q&A Session Summary Question: Guidance on EBITDA for the second half of the year - Management indicated that the guidance of at least $130 million for the second half is conservative, primarily due to increased 5G costs and other expenses [64][65] Question: Installation capacity and general aviation market - Management believes there is ample capacity to meet projections but is analyzing market inhibitors to accelerate AVANCE penetration [66][67] - The general aviation market presents a learning opportunity, with ongoing partnerships expected to enhance service offerings [68]