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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Oakleigh Thorne


It goes without saying that these are very exciting times at Gogo as we scaled our operations in support of Delta Airlines' desire to provide free internet service to its passengers as we make great progress on our Gogo 5G product initiative and as we work with our satellite partners on new and exciting ways to serve the aero IFC market. It's also exciting to see a nice bounce back on our Business Aviation division as OEMs made some nice catch-up orders in the quarter and some of the ADS-B congestion cleared up in the aftermarket. And perhaps most exciting. Today we expect to sign a contract with a very prestigious EMEA airline install Gogo 2Ku and live TV on a significant portion of their wide-body fleet. A formal announcement will be forthcoming. But needless to say I'm happy to get Gogo back in the wind tunnel. I'm very proud of my Gogo teammates for delivering such a great quarter. We've worked hard over the past year to improve our operations execute on our strategy and achieve our financial goals. And I think we're making great progress.

So thank you. Let me touch on strategy for a minute. And then I'll turn to our three business segments to discuss some operational aspects of the quarter. Strategic front. Today I'd like to talk about our network strategy. We believe that the market for and revenue from the connected aircraft is poised for accelerating growth as airlines increasingly look at providing free IFE to passengers as the aviation ecosystem looks for cheaper and faster ways to access operational data. Our strategy is to take advantage of this explosion in demand by positioning ourselves as the provider of the most trusted broadband communication systems in the aviation ecosystem. Today we serve that market with two network solutions: the Ku satellite network and air-to-ground network. In the satellite world we pursue an open architecture asset-light operating model. Today we work with 11 satellite providers and use 33 satellites to create and manage a seamless near-global network. Though we're band agnostic today we operate in the Ku-band because there are hundreds of Ku satellites.

And we can layer capability where it's needed we can scale as demand grows and we can provide more redundancies in closed Ka constellations. I want to highlight the importance of redundancy for just a second. In the last eight months three important satellites have failed on orbit or on launch. With the loss of Intelsat 29E this year Ku supply in conus is tight. The Ku service providers have still been able to serve their customers by utilizing other Ku satellites. In contrast if they were on a three-satellite closed Ka system the networks for one-third of the world would be dead to their airline customers for an extended period of time. The satellite world is going through a tremendous amount of change. And our asset-light model gives us the flexibility to harness that change to do what is