Gogo Inc. (NASDAQ:GOGO) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 08:30 am ET


Gogo Inc. (NASDAQ:GOGO) Q3 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen thank you for standing by. And welcome to the Q3 2019 Gogo Inc. Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today Mr. Will Davis Vice President or Investor Relations. Sir please go ahead.

William G. Davis

Thank you and good morning everyone. Welcome to Gogo's Third Quarter 2019 Earnings Conference Call. Joining me today to talk about our results are Oakleigh Thorne President and CEO; and Barry Rowan Executive Vice President and CFO. Before we get started I would like to take this opportunity to remind you that during the course of this call we may make forward-looking statements regarding future events and the future financial performance of the company. We caution you to consider the risk factors that could cause actual results to differ materially from those in the forward-looking statements on this conference call. These risk factors are described in our press release filed this morning and are more fully detailed under the caption Risk Factors in our annual report on Form 10-K and 10-Q and other documents we have filed with the SEC. In addition please note that the date of this conference call is November 7 2019.

Any forward-looking statements that we make today are based on assumptions as of this date. We undertake no obligation to update these statements as a result of new information or future events. During the call we will present both GAAP and non-GAAP financial measures. We include a reconciliation and explanation of adjustments and other considerations of our non-GAAP measures to the most comparable GAAP measures in our third quarter earnings press release. This call is being broadcast on the Internet and available on the Investor Relations section of Gogo's website at ir.gogoair.com. The earnings press release is also available on the website. After management comments we will host a Q&A session with the financial community only.

It is now my great pleasure to turn the call over to Oakleigh.

Oakleigh Thorne

Thanks Will. Good morning and welcome to our Q3 2019 Earnings Call. We're pleased to announce a very strong quarter with adjusted EBITDA and free cash flow well above our expectations. Though as we predicted on our last call service revenue was down as a result of the final American Airlines deinstalls and conversions in turnkey to the airline directed model. Though we're not happy about that decline in revenue it's worth noting that underlying growth has made up for a lot of that loss. We achieved $158 million of service revenue in Q3 this year which is right about where service revenue stood. In quarter the deinstall program began in earnest in early 2018. I'm also pleased that despite having an extra interest payment in the year we remain on target to improve free cash flow by $100 million over the prior year. I'll leave the rest of the numbers to Barry and now move on to some of the operational aspects of the business. And then I'll turn to