Gogo Inc. (NASDAQ:GOGO) Q4 2022 Earnings Call Transcript

Operator: Our next question comes from the line of Louie DiPalma of William Blair.

Louie DiPalma: Barry and Jessi, I am sure both of you will do great on the next phases of your respective careers. Starting off, global broadband is obviously critical for Gogo’s future. Oak, what caused you to expedite your planned launch timing for the GBB service? So typically, projects in the satellite industry are delayed often by several years but for GBB, you pushed it forward. So what’s behind that?

Oakleigh Thorne: Well, we have good partner who’s got really mature development processes and manufacturing processes, and I think we’ve been very organized as well. And frankly, OneWeb has really pitched in and it’s been a great working relationship. So we started with a late €˜24 early €˜25 kind of target. We do have some incentives built into our contracts to accelerate that. And Hugh’s responded to that and come up with ways to get the intended done sooner. And we will continue to work on other ways that might speed it up further. Time is of the essence for us in this and we really want to get to market as fast as possible.

Louie DiPalma: And one on the financial side, either for the new CFO or the old CFO, but in terms of the 2025 free cash flow target. What does that assume for maintenance CapEx and interest expense?

Jessi Betjemann: In 2025, I think by that point in time, our CapEx is going to be sort of in that maintenance range. So it’s around $20 million for maintenance CapEx. And that interest expense, obviously, it depends upon the forward rates and what happens with regards to that. But it should be — depending upon where we are with the interest expense somewhere in the range of $30 million to $45 million in interest expense depending upon what happens with the rates, probably $40 million to $45 million.

Operator: And that is our time for questions today. I’d like to turn the call back over to Will Davis for any closing remarks.

Will Davis: Thank you, Valerie. And thank you everyone for joining the call. This concludes our fourth quarter earnings conference call. Thanks very much. You may disconnect.

Operator: Thank you. Ladies and gentlemen, this concludes today’s conference. Thank you all for participating. You may now disconnect. Have a great day.