Gogo Inc (GOGO) 2021 Q3 法說會逐字稿

Good day, and thank you for standing by, and welcome to the Third Quarter 2021 Gogo Inc. Earnings Conference Call. (Operator Instructions)

美好的一天，感謝您的支持，歡迎來到 Gogo Inc. 2021 年第三季。收益電話會議。（操作員說明）

I would now like to hand the conference over to your first speaker today, Vice President of Investor Relations, William Davis. Thank you. Please go ahead.

現在，我想將會議交給今天的第一位發言者，投資者關係副總裁威廉戴維斯 (William Davis)。謝謝。請繼續。

Thank you, Nika, and good morning, everyone. Welcome to Gogo's Third Quarter 2021 Earnings Conference Call. Joining me today to talk about our results are Oakleigh Thorne, Chairman and CEO; and Barry Rowan, Executive Vice President and CFO.

謝謝你，尼卡，大家早安。歡迎參加 Gogo 2021 年第三季財報電話會議。今天與我一起談論我們業績的是董事長兼執行長奧克利‧索恩 (Oakleigh Thorne)；和巴里·羅文（Barry Rowan），執行副總裁兼財務長。

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 the conference call.

在我們開始之前，我想藉此機會提醒您，在這次電話會議期間，我們可能會就未來事件和公司未來的財務表現做出前瞻性陳述。我們提醒您考慮可能導致實際結果與電話會議中前瞻性聲明中的結果有重大差異的風險因素。

These risk factors are described in our earnings release filed this morning and are more fully detailed under the 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 4, 2021. 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 more information or future events.

這些風險因素在我們今天早上提交的收益報告中進行了描述，並在我們向 SEC 提交的 10-K 表格和 10-Q 表格年度報告以及其他文件中的風險因素中進行了更全面的詳細說明。另外，請注意，本次電話會議的日期是2021年11月4日。我們今天所做的任何前瞻性陳述均基於截至目前的假設。我們不承擔因更多資訊或未來事件而更新這些聲明的義務。

During the call, we'll present both GAAP and non-GAAP financial measures. We've included 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 release. This call is being broadcast on the Internet and available on the Investor Relations website at ir.gogoair.com. The earnings press release is also available on the website. After management comments, we'll host a Q&A session with the financial community only.

在電話會議期間，我們將介紹 GAAP 和非 GAAP 財務指標。我們在第三季財報發布中對非公認會計準則衡量指標與最具可比性的公認會計準則衡量指標的調整和其他考慮因素進行了協調和解釋。此次電話會議正在網路上播出，並可在投資者關係網站 ir.gogoair.com 上查看。收益新聞稿也可在網站上取得。在管理層提出意見後，我們將僅與金融界舉行問答會議。

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

現在我很高興將電話轉給奧克利。

Thanks, Will, and thank you all for joining us this morning. A few weeks ago, we hosted a call to discuss our recently updated long-term financial targets, so I won't repeat those today. But instead, we'll focus on Gogo's third quarter and why we believe it provides further evidence that we're on track to deliver the long-term financial targets that we recently discussed.

謝謝威爾，也謝謝大家今天早上加入我們。幾週前，我們召開了一次電話會議，討論我們最近更新的長期財務目標，所以今天我不會重複這些內容。但相反，我們將重點關注 Gogo 的第三季度，以及為什麼我們認為它提供了進一步的證據，表明我們正在實現我們最近討論的長期財務目標。

Q3 was a quarter of record performance. Gogo delivered record total revenue, record service revenue, record service gross profit, record advanced shipments and record adjusted EBITDA. We also achieved a couple of notable firsts, generating both positive net income and positive earnings per share for the first time. We were certainly helped by the powerful tailwinds driving demand for private jet travel, but we're also well prepared to capitalize on that strong demand and deliver excellent top and bottom line growth. Our advanced platform and 4G network are well positioned to meet the needs of our growing customer base and take advantage of the accelerating demand for BA connectivity and our vertically integrated and scalable business model is converting that demand into shareholder value.

第三季是創紀錄業績的季度。Gogo 創造了創紀錄的總收入、創紀錄的服務收入、創紀錄的服務毛利、創紀錄的提前出貨量和創紀錄的調整後 EBITDA。我們還實現了幾個引人注目的第一，首次實現正淨利潤和正每股收益。私人飛機旅行需求的強勁推動力無疑為我們帶來了幫助，但我們也做好了充分準備，利用這種強勁的需求，實現出色的營收和利潤成長。我們先進的平台和4G 網路能夠很好地滿足不斷增長的客戶群的需求，並利用對BA 連接不斷增長的需求，而我們的垂直整​​合和可擴展的業務模式正在將這種需求轉化為股東價值。

I'll begin with a summary of the highlights of our third quarter results, then provide some context on the current competitive landscape and Gogo's competitive advantages. And finally, introduce our updated 2021 financial guidance, which reflects the impact of continued strong equipment sales in the high-margin recurring subscription service revenue that tracks those sales. Barry will then walk through our quarterly performance and latest 2021 guidance before we open the call up to your questions.

我將首先總結第三季業績的亮點，然後提供有關當前競爭格局和 Gogo 競爭優勢的一些背景資訊。最後，介紹我們更新的 2021 年財務指引，該指引反映了持續強勁的設備銷售對追蹤這些銷售的高利潤經常性訂閱服務收入的影響。然後，在我們開始回答您的問題之前，巴里將介紹我們的季度業績和最新的 2021 年指導。

So let me start on Q3 with our demand drivers. As has been written about in the media extensively recently, the business aviation industry is on fire. Flight counts continue to grow with third quarter flight counts and Gogo equipped aircraft up 8% from Q2 and up 24% compared to pre-COVID Q3 2019. That demand for flights is driving demand for aircraft, with fleet operators deferring retirements, acquiring as many aircraft as they can in the preowned jet market and placing ever larger orders for new aircraft with OEMs. That activity is good for Gogo as fleet customers want -- as fleet customers want connectivity on those new and used jets and deferred retirements often retain Gogo connected aircraft in the fleet.

讓我從第三季的需求驅動因素開始。正如最近媒體廣泛報道的那樣，公務航空業正在火熱進行中。第三季的航班數量持續成長，配備 Gogo 的飛機比第二季成長 8%，與新冠疫情之前的 2019 年第三季相比成長 24%。對航班的需求正在推動對飛機的需求，機隊營運商推遲退役，在二手飛機市場上購買盡可能多的飛機，並向原始設備製造商下更大的新飛機訂單。這項活動對 Gogo 有利，因為機隊客戶希望在這些新飛機和二手飛機上實現連接，而延遲退役通常會在機隊中保留 Gogo 連接的飛機。

But even more impressive is the growth in demand for data on those flights. In Q3, we saw a 78% increase in megabytes consumed per day on our network, and a 44% increase in megabytes per flight as compared to pre-COVID Q3 2019. Those metrics were driven by a 33% increase in flight hours per day, a 34% increase in megabytes consumed per hour, and a 17% increase in the number of aircraft flown. Those increases drove all-time high monthly ARPU in aircraft or AOL aircraft online for Gogo. ARPU continues to grow as more than 3x as many customers upgraded plans in Q3 as downgraded plans, up from 2.3x in Q3 2020 and up from 2x in Q3 2019.

但更令人印象深刻的是對這些航班數據的需求的增長。與新冠疫情之前的 2019 年第三季相比，第三季度我們的網路每天消耗的兆位元組數增加了 78%，每次航班的兆位元組數增加了 44%。這些指標的推動因素包括每天的飛行時數增加了 33%、每小時消耗的兆位元組數增加了 34%，以及飛行的飛機數量增加了 17%。這些增長推動 Gogo 的飛機或 AOL 飛機在線每月 ARPU 創下歷史新高。ARPU 持續成長，第三季升級計畫的客戶數量是降級計畫的客戶數量的 3 倍以上，高於 2020 年第三季的 2.3 倍，高於 2019 年第三季的 2 倍。

In ATG aircraft online, AOL, also continues to grow and hit an all-time high of 6,154 aircraft at the end of Q3, up 10% from Q3 2020. That combination of ARPU and AOL growth delivered record total revenue of $87.2 million, fueled by record service revenue of $66.2 million and outstanding equipment revenue of $21 million. The strong equipment sales growth that drove us to raise our long-term financial targets in late September has continued, and our service revenue is growing nicely as more of those units are installed and activated.

在 ATG 線上飛機方面，AOL 也持續成長，並在第三季末創下 6,154 架飛機的歷史新高，較 2020 年第三季成長 10%。ARPU 和 AOL 的成長共同創造了創紀錄的總收入 8,720 萬美元，這得益於創紀錄的 6,620 萬美元的服務收入和 2,100 萬美元的未償設備收入。強勁的設備銷售成長推動我們在 9 月底提高了長期財務目標，隨著更多設備的安裝和啟用，我們的服務收入也出現了良好的成長。

I think it's also important to note that once installed and activated, our service revenue is extremely sticky. From the time we started computing churn in 2017 until now, we've averaged a 0.5% monthly churn rate, which implies a 17-year equipment life on an aircraft. That's driven by high customer satisfaction, combined with the fact that it's very expensive and time-consuming to install a new system. All of these factors continue to derisk the long-term targets we shared a few weeks ago and are a perfect demonstration of our virtuous circle business model.

我認為還需要注意的是，一旦安裝並激活，我們的服務收入就具有極高的黏性。從我們 2017 年開始計算客戶流失率到現在，我們的平均每月客戶流失率是 0.5%，這意味著飛機上的設備壽命為 17 年。這是由高客戶滿意度以及安裝新系統非常昂貴且耗時的事實所推動的。所有這些因素繼續降低我們幾週前分享的長期目標的風險，並且完美地體現了我們的良性循環商業模式。

Equipment sales profitably expand our base of subscribers, and that in turn generates recurring, sticky, high-margin service revenue, which in turn drives cash flow, enabling us to invest in improving our network, which in turn attracts new customers, generates more usage and drives more equipment shipments. Importantly, we think this demand will continue. So 85% of today's broadband connected aircraft use Gogo, approximately 70% of the market still does not have broadband, creating white space for us but raising questions from investors as to why that penetration is so low.

設備銷售有利地擴大了我們的用戶群，進而產生經常性、黏性、高利潤的服務收入，進而推動現金流，使我們能夠投資改善我們的網絡，從而吸引新客戶，產生更多使用量並帶動更多設備出貨量。重要的是，我們認為這種需求將會持續下去。因此，當今 85% 的寬頻連線飛機使用 Gogo，大約 70% 的市場仍然沒有寬頻，這為我們創造了空白，但也引發了投資者的疑問，為什麼滲透率如此之低。

There are a couple reasons for that. First, the average age of the aircraft in today's business aviation fleet is 20 years, so much of today's fleet was manufactured before a line fit with WiFi was an option. Second, when Gogo launched, the iPhone hadn't even been developed and inflight connectivity was considered a business productivity tool, mostly for doing e-mail. And many business travelers didn't even do that.

這有幾個原因。首先，當今公務航空機隊中飛機的平均機齡為 20 年，因此當今機隊中的大部分飛機是在選擇配備 WiFi 的線路之前製造的。其次，當 Gogo 推出時，iPhone 甚至還沒有開發出來，機上連線被認為是商業生產力工具，主要用於處理電子郵件。許多商務旅客甚至沒有這樣做。

But it's a different world now. Today, broadband connectivity is line fit on all 28 models of business aircraft and Gogo is line-fit on 27 of them. And today, passengers insist on being online, whether they're business travelers using Zoom or leisure travelers surfing video intense social media. I also think our advanced platform is accelerating market penetration with customers loving the L5's interactive video capabilities for Zoom calls and the small form factor L3 driving penetration of the light jet and turboprop markets where today's geo satellite providers can't compete.

但現在是一個不同的世界了。如今，寬頻連線已安裝在所有 28 款商務飛機上，Gogo 也安裝在其中 27 款飛機上。如今，無論是使用 Zoom 的商務旅客還是瀏覽影片密集型社群媒體的休閒旅客，乘客都堅持上網。我還認為，我們的先進平台正在加速市場滲透，客戶喜歡L5 用於Zoom 通話的交互式視訊功能，以及小型L3 驅動的輕型噴射機和渦輪螺旋槳飛機市場的滲透，而當今的地球衛星提供商無法在這些市場競爭。

As we talked about a few weeks ago, based on these trends, we expect a number of broadband connected BA aircraft to grow by approximately 50% by the end of 2025, substantially increasing our market opportunity. We expect to win our fair share of those aircraft by virtue of the competitive advantages I plan to talk about in more detail in a minute, namely our unique ATG network and rollout of our new 5G network, the versatility of our advanced platform and our strong relationships with our customers and distribution partners.

正如我們幾週前談到的那樣，根據這些趨勢，我們預計到 2025 年底，寬頻連接的 BA 飛機數量將增加約 50%，從而大幅增加我們的市場機會。我們希望憑藉我計劃稍後詳細討論的競爭優勢，贏得這些飛機的公平份額，即我們獨特的 ATG 網路和新 5G 網路的推出、我們先進平台的多功能性以及我們強大的與我們的客戶和分銷合作夥伴的關係。

Another important driver of Gogo's ability to drive revenue this quarter and hit our targets for the next few years is our ability to meet demand. Supply chain challenges have been systemic across our industry. However, due to a combination of our long-standing relationships with suppliers, our common componentry strategy for AVANCE and our strong balance sheet, we secured all the supply we need to not only meet our 2021 demand, but also to meet the 25% unit growth we project for 2022, further derisking the targets we shared a few weeks ago.

Gogo 能夠推動本季營收並實現未來幾年目標的另一個重要驅動因素是我們滿足需求的能力。供應鏈挑戰是整個產業的系統性挑戰。然而，由於我們與供應商的長期關係、我們對 AVANCE 的共同零件策略以及我們強大的資產負債表，我們獲得了所需的所有供應，不僅滿足 2021 年的需求，而且滿足 25% 的單位需求我們預計2022 年的成長將進一步降低我們幾週前分享的目標的風險。

Finally, but most important, because of the great work of our Gogo sales and production teams, we've been able to not only meet demand but convert that demand into bottom line profitability and value for shareholders. In Q3, we generated positive net income of $19.7 million from continuing operations, which computes to $0.16 a share on a fully diluted basis. And we achieved record adjusted EBITDA of $40.8 million, up 35% year-over-year and 11% above last quarter.

最後，但最重要的是，由於我們 Gogo 銷售和生產團隊的出色工作，我們不僅能夠滿足需求，而且能夠將需求轉化為利潤和股東價值。第三季度，我們透過持續經營業務產生了 1,970 萬美元的正淨利潤，以完全攤薄計算，每股收益為 0.16 美元。我們實現了創紀錄的調整後 EBITDA 4,080 萬美元，年增 35%，比上季增長 11%。

We expect to have positive net income going forward as our high-margin service revenue grows and our operating costs remain relatively fixed, driving operating leverage and strong growth in cash generation. We're proud of our results and the momentum we're building, and I'm really proud of the Gogo team, which continues to rise to the challenge of exceptional demand while preparing to deploy the world's first 5G ATG network. Our team's focus on our customers' needs and on continuous improvement is the key ingredient that drives our success.

隨著高利潤服務收入的成長和營運成本保持相對固定，我們預計未來淨利潤將為正，從而推動營運槓桿和現金產生的強勁成長。我們為我們的成果和我們正在建立的勢頭感到自豪，我為 Gogo 團隊感到非常自豪，他們在準備部署世界上第一個 5G ATG 網路的同時，繼續迎接特殊需求的挑戰。我們的團隊對客戶需求的關注和持續改進是推動我們成功的關鍵因素。

Now I want to turn our attention to the BA competitive landscape. Gogo has developed 3 main competitive advantages in our 30 years serving the BA market, including our proprietary ATG network, our unique and future proof AVANCE platform, and our deeply embedded relationships with our OEM and dealer partners. Together, these advantages enable us to provide an unmatched value proposition to BA manufacturers, dealers, owners and passengers. And importantly, we continue to invest in strengthening each of them.

現在我想把我們的注意力轉向BA的競爭格局。Gogo 在服務 BA 市場的 30 年中形成了 3 個主要競爭優勢，包括我們專有的 ATG 網路、我們獨特且面向未來的 AVANCE 平台以及我們與 OEM 和經銷商合作夥伴的深厚關係。這些優勢使我們能夠為 BA 製造商、經銷商、車主和乘客提供無與倫比的價值主張。重要的是，我們繼續投資加強它們。

So let me start with our proprietary network. Today, we operate the only air-to-ground network in North America and we have exclusive licenses to the only radio spectrum authorized to provide ATG connectivity to aircraft in North America. The advantage of ATG are that, first, it provides lower latency than our current GEO satellite competitors can deliver by virtue of having ground antennas that are no more than 200 miles from the aircraft, as opposed to GEO satellites, which are 22,000 miles from the aircraft.

讓我從我們的專有網路開始。如今，我們經營著北美唯一的空對地網絡，並且擁有唯一授權為北美飛機提供 ATG 連接的無線電頻譜的獨家許可。ATG 的優勢在於，首先，它提供的延遲低於我們目前的 GEO 衛星競爭對手所能提供的延遲，因為地面天線距離飛機不超過 200 英里，而 GEO 衛星距離飛機 22,000 英里。飛機。

Second, because of that close proximity, our ATG airborne antennas require less power than GEO antennas, which allows us to have much smaller form factors and to fit on far more makes and models of aircraft, thereby having a much larger total addressable market than our GEO competitors. And finally, ATG costs much less than GEO satellite-based connectivity on an equipment installation and service basis. I should add that it's not easy to build an ATG network nor is it easy to fund the operating loss as a network operator suffers between lighting up their network and activating enough customers to cover their operating costs. In Gogo's case, we need to raise more than $800 million in equity. And at that time, we were fortunate to have positive margin from providing ATG to commercial airline customers that cover some of those costs.

其次，由於距離很近，我們的ATG 機載天線比GEO 天線需要更少的功率，這使我們能夠擁有更小的外形尺寸並適合更多品牌和型號的飛機，從而擁有比我們的ATG 機載天線更大的總潛在市場GEO的競爭對手。最後，在設備安裝和服務基礎上，ATG 的成本遠低於基於 GEO 衛星的連接。我應該補充一點，建立 ATG 網路並不容易，也不容易為營運損失提供資金，因為網路營運商在點亮其網路和啟動足夠的客戶來支付其營運成本之間陷入困境。就 Gogo 而言，我們需要籌集超過 8 億美元的股本。當時，我們很幸運能夠透過向商業航空公司客戶提供 ATG 來支付部分成本，從而獲得正利潤。

A key pillar of our strategy is that we will continue to improve the performance of our ATG network to keep pace with customer expectations based on what they experience on the ground. To that point, we remain on track to deploy the world's first 5G ATG network with nationwide coverage from 150 sites in the second half of 2022. In the third quarter, Gogo achieved several significant deployment milestones. We moved from the design development phase into qualification and certification of the aircraft hardware and ground stations. We placed orders for all of our 7 tower testbed equipment, and that gear is on its way for a Q4 buildup. And third, we released installation manuals, service pricing and hardware pricing to the OEMs and dealers.

我們策略的一個關鍵支柱是，我們將繼續提高 ATG 網路的效能，以滿足客戶基於實際體驗的期望。到那時，我們仍有望在 2022 年下半年部署全球首個 5G ATG 網絡，覆蓋全國 150 個站點。第三季度，Gogo 實現了幾個重要的部署里程碑。我們從設計開發階段進入了飛機硬體和地面站的資格和認證階段。我們訂購了所有 7 塔測試台設備，這些設備即將在第四季度進行組裝。第三，我們向 OEM 和經銷商發布了安裝手冊、服務定價和硬體定價。

Beyond deployment, we've made significant progress across our 5G program. Based on recent testing and modeling across 8 commonly traveled city [fares], we announced that we expect Gogo 5G to deliver approximately 25 megabits per second on average with peak speeds in the 75 to 80 megabits per second range, a significant improvement from the 2 to 7 megabits per second that Gogo AVANCE L5 customers, interviewed by the Boston Consulting Group, reported they experience today. As business travelers increasingly require seamless video conferencing and VPN access and leisure travelers expect living room quality streaming capabilities for accessing video intense social media, Gogo 5G data speeds will be a top differentiator for Gogo.

除了部署之外，我們的 5G 計劃還取得了重大進展。根據最近在8 個經常出行的城市[票價]進行的測試和建模，我們宣布，我們預計Gogo 5G 的平均傳輸速度約為每秒25 兆比特，峰值速度在每秒75 至80 兆比特範圍內，比 2接受波士頓顧問公司採訪的 Gogo AVANCE L5 客戶表示，他們今天體驗到了每秒 7 兆比特的速度。隨著商務旅客越來越需要無縫視訊會議和 VPN 訪問，而休閒旅客則希望擁有客廳品質的串流功能來訪問視訊密集型社交媒體，Gogo 5G 數據速度將成為 Gogo 的最大差異化因素。

We also announced Jet Edge, the largest operator of super, midsized and large cabin private jets as our launch customer. Jet Edge has advanced L5s installed across the majority of its managed large-cabin fleet, and will upgrade 50 of them to Gogo 5G post-launch. A key selling point for the AVANCE L5 platform is that the upgrade path to our Gogo 5G network is much simpler than installing a new ISC system. You replace the 2 current L5 antennas with new 13-inch antennas that fit in the exact same location as the L5 antennas and add a small box inside the aircraft. The wiring, access points and main LRU all stay the same. The rest is just a software update that is done seamlessly over the air. And Gogo 5G is not the end of our ATG enhancements, and we have a road map of future enhancements aimed at improving the performance of our ATG network for years to come.

我們也宣布最大的超、中型和大型客艙私人飛機營運商 Jet Edge 成為我們的啟動客戶。Jet Edge 已在其管理的大部分大客艙機隊中安裝了先進的 L5，並將在發布後將其中 50 架升級到 Gogo 5G。AVANCE L5 平台的一個關鍵賣點是 Gogo 5G 網路的升級路徑比安裝新的 ISC 系統簡單得多。您可以將現有的 2 個 L5 天線替換為新的 13 吋天線，這些天線安裝在與 L5 天線完全相同的位置，並在飛機內添加一個小盒子。佈線、接入點和主 LRU 都保持不變。其餘的只是透過無線方式無縫完成的軟體更新。Gogo 5G 並不是我們 ATG 增強功能的終點，我們也制定了未來增強功能的路線圖，旨在提高未來幾年 ATG 網路的效能。

Our second major competitive advantage is our AVANCE platform. Like Apple products, AVANCE is a software-centric platform that includes a set of hardware devices built on common components that all operate on a single operating system that transcends the cloud and all our devices. AVANCE allows us to first provide a whole new level of customer service, which drives stickiness. Second, allows us to seamlessly add apps over the air to drive increased ARPU and/or stickiness. And third, allows us to add new network technologies as they evolve to provide more capacity, coverage and performance for our customers.

我們的第二個主要競爭優勢是我們的 AVANCE 平台。與 Apple 產品一樣，AVANCE 是一個以軟體為中心的平台，包括一組基於通用組件​​構建的硬體設備，所有這些設備都在超越雲端和所有設備的單一作業系統上運行。AVANCE 使我們能夠首先提供全新水準的客戶服務，從而提高黏性。其次，允許我們透過無線方式無縫添加應用程序，以提高 ARPU 和/或黏性。第三，讓我們隨著新網路技術的發展而添加新的網路技術，為我們的客戶提供更多的容量、覆蓋範圍和效能。

A good example of our AVANCE customer service features would be the automated ticket creation feature. The system constantly monitors itself and as it identifies issues, it auto creates trouble tickets, thereby allowing us to take corrective action often before the customer even knows they have a problem. A good example of seamlessly adding apps to drive stickiness is our recent mix app, which allows flight departments to remotely scale different levels of service to different users on the aircraft, thereby ensuring that each passenger gets the appropriate experience.

我們 AVANCE 客戶服務功能的一個很好的例子就是自動票證建立功能。該系統不斷自我監控，當它發現問題時，它會自動建立故障單，使我們能夠在客戶知道他們有問題之前經常採取糾正措施。無縫添加應用程式以提高黏性的一個很好的例子是我們最近的混合應用程序，它允許飛行部門向飛機上的不同用戶遠端擴展不同級別的服務，從而確保每位乘客獲得適當的體驗。

And a good example of AVANCE flexibility in incorporating new network technologies would be the LEO networks that are being launched over the next few years. AVANCE could support a LEO network aggregated with our ATG network over North America to deliver more bandwidth than either network could deliver on its own. It would also expand our total addressable market to include the 14,000 business aircraft that are registered and predominantly fly outside North America.

AVANCE 在整合新網路技術方面的靈活性的一個很好的例子就是未來幾年推出的 LEO 網路。AVANCE 可以支援 LEO 網路與我們在北美的 ATG 網路聚合，以提供比任一網路單獨提供的頻寬更多的頻寬。它還將擴大我們的總目標市場，將 14,000 架註冊且主要在北美以外地區飛行的公務飛機納入其中。

AVANCE gives us a tremendous advantage addressing the LEO opportunity, because we could add an electronically steerable antenna, ESA, on top of the aircraft and run wiring down to the advanced LLU and that would be the extent of the hardware upgrade. The rest of the upgrade would be completed with an over-the-air software update. Our third major competitive advantage is our relationships with dealers and OEMs. I discussed OEMs a moment ago, so we'll focus these comments on dealers and MROs. As we've said before, Gogo has a high-quality network of 120 dealers worldwide. These mutually profitable relationships are incredibly valuable and took many years to build. Our distribution partners are invested in Gogo and they know we can be relied upon to deliver quality products on a timely basis, and that those products will make their customers happy.

AVANCE 為我們提供了應對 LEO 機會的巨大優勢，因為我們可以在飛機頂部添加電子可控天線 (ESA)，並將佈線向下延伸到先進的 LLU，這就是硬體升級的範圍。其餘的升級將透過無線軟體更新來完成。我們的第三個主要競爭優勢是我們與經銷商和原始設備製造商的關係。我剛剛討論了 OEM，因此我們將重點放在經銷商和 MRO。正如我們之前所說，Gogo 在全球擁有由 120 家經銷商組成的高品質網路。這些互惠互利的關係非常有價值，並且需要多年的時間才能建立。我們的分銷合作夥伴投資了 Gogo，他們知道我們可以信賴我們及時交付優質產品，而這些產品將使他們的客戶滿意。

Evidence of the strength of these relationships with the announcement by Duncan Aviation, the largest independent MRO in the United States, to modify all of its full equipment AVANCE L5 STCs to include Gogo 5G, which will cover more than 30 aircraft models, including aircraft manufactured by Bombardier, Gulfstream, Dassault and Textron.

美國最大的獨立 MRO Duncan Aviation 宣布修改其所有全套設備 AVANCE L5 STC 以納入 Gogo 5G，證明了這些關係的強度，這將涵蓋 30 多種飛機型號，包括製造的飛機由龐巴迪、灣流、達梭和德事隆製造。

Now let me turn to the competitive landscape. Competitors fall into 2 buckets -- GEO satellite service providers and the potential new ATG service provider. Let's start with GEO satellite service providers. Their main advantage is that they have broader coverage than Gogo. However, since 87% of all BA flights are in North America, Gogo can still serve most BA aircraft missions. As mentioned earlier, Gogo's advantages over GEOs are, A, smaller form factors, allowing us to serve all makes and models of aircraft while GEO providers have heavier and larger form factors and are limited to larger jets; B, a significant latency advantage, which is very important for interactive video applications like Zoom; and C, Gogo is cheaper on all fronts, including equipment, installation and service.

現在讓我談談競爭格局。競爭對手分為兩類：GEO 衛星服務供應商和潛在的新 ATG 服務供應商。讓我們從 GEO 衛星服務提供者開始。他們的主要優勢是比 Gogo 覆蓋範圍更廣。然而，由於 87% 的 BA 航班都在北美，Gogo 仍然可以為大多數 BA 飛機執行任務。如前所述，Gogo 相對於GEO 的優勢在於，A 外形尺寸更小，使我們能夠為所有品牌和型號的飛機提供服務，而GEO 提供商的外形尺寸更重、更大，並且僅限於大型噴氣式飛機； B、顯著的延遲優勢，這對Zoom這樣的互動式視訊應用非常重要； C、Gogo 在各方面都更便宜，包括設備、安裝和服務。

Now let's turn to the potential new ATG entrant. They faced many challenges, starting with a lack of credibility with the distribution channels and customers. After originally announcing that they would deploy a nationwide network in 2016, they have missed a series of launch dates over the last 5 years and have recently said they would complete their network by the end of this year, but have now slipped once again and are now saying they will complete the network by the end of the second quarter next year. As a result of these delays, this potential competitor has no credibility in the distribution channels and they will need to complete and successfully operate their network for some period of time before they can regain credibility.

現在讓我們來看看潛在的 ATG 新進者。他們面臨許多挑戰，首先是分銷管道和客戶缺乏可信度。最初宣布將在 2016 年部署全國性網路後，他們在過去 5 年裡錯過了一系列啟動日期，最近又表示將在今年年底前完成網路建設，但現在又再次下滑，現在表示他們將在明年第二季度末完成該網路。由於這些延誤，該潛在競爭對手在分銷管道中沒有信譽，他們需要在一段時間內完成並成功運營其網絡，然後才能重新獲得信譽。

Even then, they'll face challenges. They recently announced their network will generally achieve speeds in the 5 to 8 megabits per second range, with peak speeds up to 15 megabits per second. Their speeds are roughly equivalent to what our L5 customers on our 4G network experience currently and well below the average speeds in the 25 megabits per second range and peak speeds of 75 to 80 megabits per second that we expect customers to experience with Gogo 5G. Besides our distribution channel and speed advantages, we also expect they will face challenges around the size of their antennas and they will need to raise considerably more capital to finish their network and operate it to profitability, which, given all the other challenges they face, is a challenge in its own right.

即便如此，他們仍將面臨挑戰。他們最近宣布，他們的網路速度通常會達到每秒 5 到 8 兆比特，峰值速度可達每秒 15 兆比特。它們的速度大致相當於我們L5 客戶目前在4G 網路上體驗到的速度，遠低於我們期望客戶在Gogo 5G 中體驗到的每秒25 兆比特範圍內的平均速度和每秒75 至80 兆比特的峰值速度。除了我們的分銷管道和速度優勢之外，我們還預計他們將面臨天線尺寸方面的挑戰，他們將需要籌集更多資金來完成他們的網絡並運營它以實現盈利，考慮到他們面臨的所有其他挑戰，其本身就是一個挑戰。

More broadly in the market, we also see exciting opportunities to partner with potential new entrants in the LEO satellite service space. Of the 3 LEO providers launching or likely to launch over the next few years, 2 are committed to B2B models, and we are in discussions with them about us providing a LEO global broadband product to our vertical market. This would allow us to add the 14,000 business aircraft outside of North America to our total addressable market, and to provide an integrated advanced ATG and LEO product to the North American market, which we think would be especially valuable to North American heavy jets that fly globally and use both ATG and GEO satellite solutions today.

在更廣泛的市場中，我們還看到了與低地球軌道衛星服務領域的潛在新進入者合作的令人興奮的機會。在未來幾年推出或可能推出的 3 家 LEO 供應商中，有 2 家致力於 B2B 模式，我們正在與他們討論向我們的垂直市場提供 LEO 全球寬頻產品。這將使我們能夠將北美以外的 14,000 架公務機添加到我們的總目標市場中，並向北美市場提供整合的先進 ATG 和 LEO 產品，我們認為這對於飛行的北美重型噴射機特別有價值目前在全球範圍內使用ATG 和GEO 衛星解決方案。

The third LEO provider is Starlink, which is currently in beta test in pursuing the global broadband market, estimated at $350 billion in revenue this year with a direct-to-consumer model. They have discussed also pursuing the $80 billion military gov market, the $25 billion connected car market and the $7 billion U.S. commercial aviation market, among others. Business aviation connectivity is tiny compared to those opportunities, estimated at less than $500 million in service revenue this year.

第三家 LEO 供應商是 Starlink，該公司目前正在進行 beta 測試，以進軍全球寬頻市場，預計今年透過直接面向消費者的模式收入將達到 3,500 億美元。他們還討論了進軍 800 億美元的軍事政府市場、250 億美元的連網汽車市場和 70 億美元的美國商業航空市場等。與這些機會相比，公務航空連通性微乎其微，預計今年的服務收入不到 5 億美元。

Given the relative size of the BA market opportunity and given the BA, business aviation connectivity is highly regulated as complex distribution channels and has a highly fragmented customer base, we would be surprised if entering our market were a high priority for Starlink. Meanwhile, we think we are well positioned to launch a LEO add-on to our AVANCE platform given our current distribution channel relationships, given that we will have a large AVANCE installed base that would be LEO ready and given that we will be able to leverage AVANCE certifications for our LEO product, just like we're doing today for 5G.

考慮到 BA 市場機會的相對規模，以及 BA、公務航空連接作為複雜的分銷管道受到嚴格監管，並且擁有高度分散的客戶群，如果進入我們的市場是 Starlink 的高度優先事項，我們會感到驚訝。同時，考慮到我們目前的分銷管道關係，考慮到我們將擁有龐大的 AVANCE 安裝基礎，並且我們將能夠利用我們的 LEO 產品獲得了 AVANCE 認證，就像我們今天為 5G 所做的那樣。

Now I'll touch briefly on our updated 2021 financial guidance before turning the call over to Barry. This morning, we raised our 2021 adjusted EBITDA and free cash flow guidance and noted that our full year revenue is expected to come in at the high end of our previous guidance range. This is the third time we've raised 2021 guidance and our raised expectations are driven by significant growth in Gogo equipment sales, supported by strong industry tailwinds and growth of the high-margin recurring subscription service revenue that follows activation of our equipment. That margin growth and the relatively fixed nature of our operating costs creates tremendous operating leverage and will drive substantial cash generation after completion of our 5G network in 2022.

現在，在將電話轉給巴里之前，我將簡要介紹我們更新的 2021 年財務指引。今天上午，我們上調了 2021 年調整後 EBITDA 和自由現金流指引，並指出我們的全年收入預計將達到先前指引範圍的高端。這是我們第三次上調 2021 年指引，我們上調的預期是由 Gogo 設備銷售的顯著增長推動的，受到強勁的行業順風和設備激活後高利潤經常性訂閱服務收入增長的支持。利潤成長和營運成本相對固定的性質創造了巨大的營運槓桿，並將在 2022 年完成 5G 網路後推動大量現金產生。

A brief note on next year. We expect continued strong revenue growth, but would like to remind investors that it will be an investment year as we complete our 5G network. And those investments will mute growth in our adjusted EBITDA and net income until the 5G tower investments are largely installed. We're excited about the future of Gogo's ability to deliver for our customers, shareholders and employees as we execute on our strategy for long-term value creation.

關於明年的簡短說明。我們預計收入將持續強勁成長，但要提醒投資者，隨著我們完成 5G 網絡，這將是投資年。在 5G 塔投資大部分安裝之前，這些投資將抑制我們調整後 EBITDA 和淨利潤的成長。在我們執行長期價值創造策略的過程中，我們對 Gogo 未來為客戶、股東和員工提供服務的能力感到興奮。

And with that, I'll turn it over to Barry.

有了這個，我會把它交給巴里。

Thanks, Oak, and good morning, everyone. As Oak mentioned, the tailwinds driving the business aviation market are strong and by all indications are sustaining and picking up momentum. This, coupled with Gogo's business execution, creates a strong foundation for continued profitable growth.

謝謝奧克，大家早安。正如奧克所提到的，推動公務航空市場的動力強勁，而且從所有跡象來看，這一勢頭正在持續並回升。這與 Gogo 的業務執行相結合，為持續獲利成長奠定了堅實的基礎。

As we have demonstrated, our financial model is a virtuous circle. Strong equipment shipments drive high-margin recurring service revenue, leading to strong cash flow that we can invest in enhancing our network, which in turn attracts new customers, generates more usage and drives more equipment shipments. Our record third quarter results demonstrate that our model is firing on all cylinders as we reach an exciting inflection point for the company, which was that Gogo generated positive net income and EPS for the first time, as Oak mentioned.

正如我們所證明的，我們的財務模式是一個良性循環。強勁的設備出貨量推動了高利潤的經常性服務收入，從而帶來強勁的現金流，我們可以投資增強我們的網絡，從而吸引新客戶，產生更多的使用量並推動更多的設備出貨量。我們創紀錄的第三季業績表明，我們的模型正在全速運轉，因為我們達到了公司令人興奮的拐點，正如 Oak 所提到的，Gogo 首次產生了正的淨利潤和每股收益。

Strong equipment shipments are derisking our long-term targets, and we continue to strengthen our balance sheet to enhance our foundation for innovation, investment in future success, and eventually, capital returns.

強勁的設備出貨量正在降低我們的長期目標的風險，我們將繼續強化我們的資產負債表，以增強我們的創新基礎、對未來成功的投資以及最終的資本回報。

I'll walk through the key results of the quarter, starting with the top line, which are a reflection of the accelerating strength of the business aviation market and Gogo's unique ability to capitalize on that growing demand. Total revenue for the third quarter was a record $87.2 million, increasing 31% year-over-year and 6% sequentially, driven by strong growth in both service and equipment revenue as demand continues to exceed our expectations. Our record service revenue of $66.2 million in the third quarter represents an increase of 24% year-over-year and was driven mainly by more AVANCE units coming online.

我將從營收開始介紹本季的主要業績，這些業績反映了公務航空市場的加速成長以及 Gogo 利用這一不斷增長的需求的獨特能力。第三季總營收達到創紀錄的 8,720 萬美元，年增 31%，季增 6%，這主要得益於服務和設備收入的強勁成長，以及需求持續超出我們的預期。第三季我們的服務收入達到創紀錄的 6,620 萬美元，年增 24%，這主要是由於更多 AVANCE 設備上線所致。

On a sequential basis, our third quarter service revenue grew 5%, excluding the onetime benefit of $1.8 million in our second quarter from recognizing deferred revenue from a specific customer contract. Growth of our recurring subscription-based service revenue is a key long-term value driver of our business. ATG aircraft online reached 6,154, up 10% compared to the third quarter of last year and 2% compared to the second quarter of this year. New customer activations remain strong, representing over 60% of total activations during the quarter, which is in line with the last several quarters.

以環比計算，我們第三季的服務收入成長了 5%，不包括第二季因確認特定客戶合約的遞延收入而獲得的 180 萬美元的一次性收益。我們基於訂閱的經常性服務收入的成長是我們業務的關鍵長期價值驅動力。ATG線上飛機數量達到6,154架，比去年第三季成長10%，比今年第二季成長2%。新客戶啟動量依然強勁，佔本季總啟動量的 60% 以上，與過去幾季的情況一致。

As we said over the past year, penetration of the AVANCE platform into both our installed base and with new customers is a centerpiece of our long-term strategy. AVANCE provides unparalleled extensibility as our technology evolves, laying the foundation for even stickier enduring relationships with our customers. In the third quarter, total AVANCE units online grew to 2,237, an increase of 46% compared to Q3 2020. This is comparable to AVANCE growth for the last 5 quarters, which ranged from 42% to 51%. AVANCE units comprised 36% of total AOL as of September 30, 2021, a meaningful increase from the 27% a year ago.

正如我們去年所說，AVANCE 平台滲透到我們的安裝基礎和新客戶中是我們長期策略的核心。隨著我們技術的發展，AVANCE 提供了無與倫比的可擴展性，為與客戶建立更牢固的持久關係奠定了基礎。第三季度，AVANCE 線上總銷量增至 2,237 輛，較 2020 年第三季成長 46%。這與過去 5 個季度 AVANCE 的成長相當，後者的成長率為 42% 至 51%。截至 2021 年 9 月 30 日，AVANCE 單位佔 AOL 總數的 36%，比一年前的 27% 顯著增加。

As we grew our AOL, ARPU also grew to $3,264, representing an increase of 9% year-over-year. Excluding the onetime benefit from last quarter's deferred revenue, ARPU increased 2% sequentially. Looking ahead, we expect our 2021 revenue to be at the high end of the guidance range we announced last quarter, reflecting our expectations that service revenue for the full year 2021 will grow at least 20% over the full year 2020.

隨著 AOL 的成長，ARPU 也成長至 3,264 美元，年增 9%。排除上一季遞延收入帶來的一次性收益，ARPU 則是季增 2%。展望未來，我們預計 2021 年的收入將處於我們上季度宣布的指導範圍的高端，這反映了我們對 2021 年全年服務收入將比 2020 年全年增長至少 20% 的預期。

Turning now to equipment revenue. Gogo delivered very strong equipment revenue of $21 million, a dramatic 59% increase year-over-year and a 19% increase sequentially due to strong demand for our AVANCE L3 and L5 products. We had a record 264 AVANCE product shipments in the third quarter, which represents 58% growth from Q3 2020 and 33% growth sequentially. It's worth noting that our expectations for 2021 AVANCE shipments are now more than 30% ahead of our original 2021 internal budget.

現在轉向設備收入。由於對我們的 AVANCE L3 和 L5 產品的強勁需求，Gogo 的設備收入非常強勁，達到 2100 萬美元，同比大幅增長 59%，環比增長 19%。第三季我們的 AVANCE 產品出貨量達到創紀錄的 264 件，較 2020 年第三季成長 58%，比上一季成長 33%。值得注意的是，我們對 2021 年 AVANCE 出貨量的預期目前比我們最初的 2021 年內部預算提前了 30% 以上。

Our 2021 revenue guidance reflects equipment revenue for the full year 2021 at 30% above 2020 levels. This strong performance is based on the underlying strength of the market, as well as the seasonal dynamics of our business. We generally see equipment sales backloaded to the second half of the year, and we expect that same seasonality to occur this year. As we shared at the end of September when we updated our long-term financial targets, we expect continuing strength in AVANCE shipments with growth of 20% to 25% next year, and this, on top of this year's strong performance.

我們的 2021 年收入指引反映了 2021 年全年的設備收入比 2020 年水準高出 30%。這種強勁的業績是基於市場的潛在實力以及我們業務的季節性動態。我們通常認為設備銷售會推遲到下半年，並且預計今年也會出現同樣的季節性。正如我們在 9 月底更新長期財務目標時所分享的那樣，我們預計 AVANCE 出貨量將在今年強勁表現的基礎上持續強勁，明年將增長 20% 至 25%。

Let me add one final point regarding equipment shipments, and that is to underscore the important results achieved by our production operations team in the face of the global supply chain crisis. As Oak described, our efforts to efficiently manage our supply chain benefit from our AVANCE platform hardware strategy, which is focused on standardizing common componentry across our L3 and L5 products to manage our costs and drive quality. Gogo is also committing $10 million in cash for additional inventory purchases during 2022 to ensure we meet demand and to reduce our quoted lead times.

關於設備出貨，我想補充一點，就是強調我們的生產營運團隊在全球供應鏈危機面前所取得的重要成果。正如 Oak 所描述的，我們高效管理供應鏈的努力受益於我們的 AVANCE 平台硬體策略，該策略的重點是標準化 L3 和 L5 產品的通用組件，以管理我們的成本並提高品質。Gogo 還承諾在 2022 年期間投入 1000 萬美元現金用於額外庫存採購，以確保滿足需求並縮短報價的交貨時間。

The outstanding results achieved by our supply chain team certainly derisk our long-term guidance by ensuring that we can deliver on equipment orders that already stretch well into 2022.

我們的供應鏈團隊的出色成果肯定會損害我們的長期指導，因為我們無法確保我們能夠交付已經延續到 2022 年的設備訂單。

Now I'll turn to a discussion of our profitability for the quarter. Our stronger-than-expected performance in the third quarter reflected the power of our business model, which flows from our recurring high-margin service revenue. Gogo delivered service margins of 80% in the third quarter, an increase of 300 basis points sequentially. This increase was mainly driven by a onetime $2 million catch-up credit for federal universal service fund regulatory surcharges from which we have recently become exempt. Telecommunications companies must pay a percentage of their interstate end user revenues to the fund. And due to changes in our operating structure in 2020 prior to the sale of the CA division, Gogo is now exempt from these surcharges, and this credit was for the 7 months, from January through July of this year.

現在我將討論我們本季的獲利能力。我們第三季強於預期的業績反映了我們業務模式的力量，這種力量源自於我們經常性的高利潤服務收入。Gogo 第三季的服務利潤率為 80%，比上一季成長了 300 個基點。這一增長主要是由於聯邦普遍服務基金監管附加費一次性 200 萬美元的補充信貸推動的，我們最近已免除該附加費。電信公司必須向該基金支付其州際最終用戶收入的一定比例。由於我們在 2020 年出售 CA 部門之前的營運結構發生了變化，Gogo 現在可以免除這些附加費，並且該抵免適用於今年 1 月至 7 月的 7 個月。

Beginning in August 2021 and going forward, we will have $3 million in annual savings as a result of the exemption, and this impact was favored into the -- factored into long-term targets we announced in late September. Excluding this credit, service margin would have been in line with expectations and approximately even with last quarter's 77%. As we've said previously, we anticipate service margins to come down to the mid-70%s in the fourth quarter of this year and for 2022 and then to increase over the longer term as we benefit from increased operating leverage.

從 2021 年 8 月開始，我們將因豁免而每年節省 300 萬美元，這一影響已納入我們 9 月底宣布的長期目標。排除此項信貸，服務利潤率將符合預期，並且與上季的 77% 大致相同。正如我們之前所說，我們預計今年第四季和 2022 年服務利潤率將下降至 70% 左右，然後隨著我們受益於營運槓桿的增加，長期來看將會增加。

On the equipment side, margins increased to 41% in the third quarter, an increase of 320 basis points sequentially, driven by strong equipment sales and mix skewing more significantly toward AVANCE product in line with our strategy. This profitable customer acquisition is a significant differentiator of the unit economics of our business, particularly relative to traditional telecom and other digital infrastructure businesses. We continue to expect equipment margins for the full year 2021 to be above the 2020 levels, even as margins in the second half are expected to be lower than in the first half of the year, largely due to mix between L3 and L5 equipment shipments.

在設備方面，受強勁的設備銷售和符合我們策略的 AVANCE 產品組合的推動，第三季利潤率增至 41%，環比增長 320 個基點。這種有利可圖的客戶獲取是我們業務單位經濟效益的顯著差異化因素，特別是相對於傳統電信和其他數位基礎設施業務。我們繼續預計 2021 年全年的設備利潤率將高於 2020 年的水平，儘管下半年的利潤率預計將低於上半年，這主要是由於 L3 和 L5 設備出貨量的混合。

It's important to note that while equipment margins are lower on the less expensive L3 product, service margins are quite similar across the 2 product offerings which, of course, is most important for our overall business model. Our L3 product is delivering on its strategic objective of penetrating the market for smaller airframes, as demonstrated by our continued momentum in personal jets including our previously announced agreement with Cyrus as well as the HondaJet announcement Oak referenced on this call.

值得注意的是，雖然較便宜的 L3 產品的設備利潤率較低，但兩種產品的服務利潤率非常相似，這當然對我們的整體業務模式來說是最重要的。我們的L3 產品正在實現其滲透小型機身市場的戰略目標，我們在私人飛機領域的持續發展勢頭就證明了這一點，包括我們之前宣布的與Cyrus 的協議以及本次電話會議中提到的HondaJet公告Oak。

Moving to operating expenses. Gogo's third quarter combined engineering, design and development, sales and marketing and G&A expenses of $26.7 million increased 16% year-over-year. This was primarily due to a onetime catch-up in noncash stock-based compensation expense related to vesting that occurs on employee retirements and primarily impacted G&A. Q3 OpEx spending did benefit from a reduction of $3 million relative to our previous expectations, half of which are permanent savings and half being deferred to future periods. We expect -- we continue to expect G&A to decrease in 2021 relative to 2020. We also remain on track to deliver our targeted $10 million reduction in G&A, excluding noncash stock-based compensation from the 2020 level by the end of 2022.

轉向營運費用。Gogo 第三季的工程、設計和開發、銷售和行銷以及一般管理費用合計為 2,670 萬美元，較去年同期成長 16%。這主要是由於與員工退休時發生的歸屬相關的非現金股票補償費用一次性增加，主要影響一般管理費用。第三季營運支出確實比我們之前的預期減少了 300 萬美元，其中一半是永久性節省，一半是推遲到未來時期。我們預計 - 我們繼續預計 2021 年的一般管理費用將比 2020 年減少。我們也有望在 2022 年底前實現 G&A 削減 1,000 萬美元的目標，其中不包括 2020 年水準的非現金股票薪酬。

Now I'll provide some additional detail on our Gogo 5G program and spending profile. As I've mentioned, we are on track to deploy our 5G ATG network in the second half of 2022. In the third quarter, we spent a total of $1.8 million in external Gogo 5G development and deployment costs, split evenly between CapEx and OpEx. Two factors contributed to the level and timing of Gogo 5G related spending. First, we have reached the accounting requirements to capitalize Gogo 5G spend earlier than originally budgeted. We demonstrated technical feasibility in early 2020 and achieved R&D completion milestones for Gogo 5G in July of this year. As a result, we expect to capitalize $3 million of Gogo 5G costs in 2021 that were initially anticipated to be treated as OpEx.

現在我將提供有關 Gogo 5G 計劃和支出概況的更多詳細資訊。正如我所提到的，我們預計在 2022 年下半年部署 5G ATG 網路。第三季度，我們總共花費了 180 萬美元用於外部 Gogo 5G 開發和部署成本，由資本支出和營運支出平均分配。有兩個因素影響了 Gogo 5G 相關支出的水平和時機。首先，我們已經達到了比最初預算更早將 Gogo 5G 支出​​資本化的會計要求。我們於2020年初展示了技術可行性，並在今年7月實現了Gogo 5G的研發完成里程碑。因此，我們預計 2021 年將 Gogo 5G 成本資本化為 300 萬美元，這些成本最初預計被視為營運支出。

Secondly, we are expecting that some OpEx and CapEx spend projected previously in Q4 2021 will shift to the first quarter of 2022. I want to be clear that these shifts in our spend schedule do not change our expectations on the timing of network deployment. As we look ahead, our Gogo 5G spend is expected to ramp significantly in the fourth quarter and to peak in the first quarter of 2022 in anticipation of our launch in the second half of next year. We expect that over 90% of our total Gogo 5G investment of approximately $100 million will be completed by the end of 2022.

其次，我們預計先前預計 2021 年第四季的部分營運支出和資本支出將轉移到 2022 年第一季。我想澄清的是，我們支出計畫的這些變化不會改變我們對網路部署時間的預期。展望未來，我們的 Gogo 5G 支出​​預計將在第四季度大幅成長，並在 2022 年第一季達到峰值，預計我們將於明年下半年推出。我們預計 Gogo 5G 投資總額約 1 億美元的 90% 以上將在 2022 年底前完成。

It's significant that we are able to fund the entire remaining amount of Gogo 5G deployment costs from internally generated cash flow. To reiterate our long-term expectations after Gogo 5G is launched, we expect ongoing capital expenditures in the $15 million to $20 million range annually, supporting an even stronger adjusted EBITDA to free cash flow conversion rate in 2023 and beyond.

重要的是，我們能夠透過內部產生的現金流量來支付 Gogo 5G 部署成本的全部剩餘金額。為了重申 Gogo 5G 推出後的長期預期，我們預計每年持續的資本支出將在 1500 萬至 2000 萬美元範圍內，支持 2023 年及以後更強勁的調整後 EBITDA 與自由現金流的轉換率。

Now on to our bottom line. Our adjusted EBITDA of $40.8 million was a new record and represents a 35% increase year-over-year and an 11% increase sequentially. This record certainly reflects the strength of our business model and the underlying trends driving our business. As I mentioned a few minutes ago, our third quarter adjusted EBITDA does include some benefits that we don't expect to recur, namely the $2 million credit for federal universal service fund surcharges. Our full year 2021 guidance for adjusted EBITDA, which we increased to a range of $140 million to $145 million from our previous guidance of more than $130 million reflects our somewhat lower adjusted (technical difficulty) fourth quarter versus this quarter. This is due to the onetime surcharge credit in Q3 and lower equipment margins and higher operating expenses related to 5G deployment expected in the upcoming quarter.

現在談談我們的底線。我們的調整後 EBITDA 為 4,080 萬美元，創下新紀錄，年增 35%，季增 11%。這項記錄無疑反映了我們業務模式的優勢以及推動我們業務的潛在趨勢。正如我幾分鐘前提到的，我們第三季調整後的 EBITDA 確實包括一些我們預計不會再次出現的福利，即聯邦普遍服務基金附加費的 200 萬美元信貸。我們對 2021 年全年調整後 EBITDA 的指引從先前超過 1.3 億美元的指引提高到 1.4 億至 1.45 億美元，反映出我們第四季度調整後（技術難度）較本季有所降低。這是由於第三季的一次性附加費抵免以及預計下一季的 5G 部署相關的設備利潤率較低和營運費用較高。

As we mentioned earlier in the call, Gogo achieved a tremendous milestone in our third quarter. We achieved positive net income for the first time. During this quarter, we achieved $19.7 million in net income from continuing operations, which translated into $0.18 in basic earnings per share and $0.16 in diluted earnings per share from continuing operations. Free cash flow for the quarter was $24.6 million. This reflects our strong top line growth and healthy 47% adjusted EBITDA margins, as well as the impact of the comprehensive refinancing we completed in April, which materially reduced our annual interest expense and enhances our strategic and financial flexibility. While there will certainly be variation from quarter-to-quarter, particularly due to the timing of our Gogo 5G investment, our expectation is to deliver positive annual free cash flow going forward. Based on this performance, we have increased our free cash flow guidance for 2021. And as you know, we substantially increased expectations for free cash flow in 2023 and 2025 several weeks ago.

正如我們之前在電話會議中提到的，Gogo 在第三季實現了一個巨大的里程碑。我們首次實現了正淨利。本季度，我們實現了來自持續經營業務的淨利潤 1,970 萬美元，這意味著每股基本收益為 0.18 美元，稀釋後每股收益為 0.16 美元。該季度的自由現金流為 2,460 萬美元。這反映了我們強勁的營收成長和47% 的調整後EBITDA 利潤率，以及我們4 月完成的全面再融資的影響，該融資大幅減少了我們的年度利息支出，增強了我們的策略和財務靈活性。雖然季度與季度之間肯定會存在差異，特別是由於我們 Gogo 5G 投資的時間安排，但我們的預期是未來將實現正的年度自由現金流。基於這項業績，我們提高了 2021 年的自由現金流指引。如您所知，幾週前我們大幅提高了對 2023 年和 2025 年自由現金流的預期。

Now let's turn to a discussion of our balance sheet. Gogo is in a very strong liquidity position with $133.2 million in cash on hand as of September 30 and our $100 million revolver remains undrawn. As of the end of the third quarter, we had approximately $826.2 million in outstanding debt including the $723 million Term Loan B we recently put in place and approximately $103 million in outstanding convertible notes. Our strong financial performance has reduced our net leverage ratio to 4.7x based on our year-to-date annualized results as of September 2021. This is a dramatic improvement over where we were a year ago just before the CA divestiture. Based on annualizing 3 quarters of adjusted EBITDA from continuing operations for the first 3 quarters of 2020, our net leverage ratio for continuing operations was 10.1x at September 30 a year ago, more than double our current leverage ratio.

現在讓我們來討論我們的資產負債表。截至 9 月 30 日，Gogo 的流動性狀況非常強勁，手頭現金為 1.332 億美元，而我們的 1 億美元左輪手槍仍未提取。截至第三季末，我們的未償債務約為 8.262 億美元，包括我們最近發放的 7.23 億美元定期貸款 B 和約 1.03 億美元的未償可轉換票據。根據截至 2021 年 9 月的年初至今年化業績，我們強勁的財務業績已將淨槓桿率降低至 4.7 倍。與一年前 CA 剝離之前相比，這是一個巨大的進步。根據 2020 年前 3 季持續經營業務的 3 個季度調整後 EBITDA 年化計算，截至去年 9 月 30 日，我們的持續經營業務淨槓桿率為 10.1 倍，是目前槓桿率的兩倍多。

I'm also pleased to highlight one of the provisions we're able to negotiate as a part of our most recent financing, which was that our interest rate would decline as our leverage declines. During the third quarter, our lower leverage ratio enabled us to achieve the maximum 50 basis point reduction in the interest rate on our Term Loan B as provided by our contract. Our interest rate will be reduced to LIBOR plus 3.25% with a 75 basis point LIBOR floor and our revolver commitment fee will be reduced by 25 basis points. These reduced rates will take effect in November and in aggregate will result in approximately $3.8 million in annual savings.

我還很高興強調作為我們最近融資的一部分我們能夠協商的條款之一，即我們的利率將隨著槓桿率的下降而下降。第三季度，我們較低的槓桿率使我們能夠按照合約規定將定期貸款 B 的利率降低高達 50 個基點。我們的利率將降至 LIBOR 加 3.25%，LIBOR 下限為 75 個基點，而我們的左輪承諾費將減少 25 個基點。這些降低的費率將於 11 月生效，總計每年將節省約 380 萬美元。

Assuming we settle conversions of the $103 million in convertible notes maturing in May of 2022 in stock as currently planned, we expect our net leverage ratio to be below 4x by the end of 2022. With this final step in our comprehensive refinancing plan, our annual interest expense will have been reduced from $111 million before our April refinancing to approximately $30 million annually after the equitization of the remaining convertible notes and reflecting the reduced interest rates due to our lower leverage ratio, as I mentioned a moment ago.

假設我們按照目前計劃以股票形式結算 2022 年 5 月到期的 1.03 億美元可轉換票據的轉換，我們預計到 2022 年底我們的淨槓桿率將低於 4 倍。透過我們全面再融資計畫的最後一步，我們的年利息支出將從4 月再融資前的1.11 億美元減少到剩餘可轉換票據股權化後的每年約3,000 萬美元，並反映出由於我們的槓桿率較低而導致的利率下降，正如我剛才提到的。

Our strong balance sheet and financial performance afford Gogo unprecedented levels of strategic and financial flexibility. On previous calls, we indicated that we would pursue a balanced capital allocation strategy focused on 4 primary areas in the following order of priority. First is enhancing our network through the deployment of Gogo 5G. Second is reducing overall leverage to an appropriate operating level. Third is strategically investing in our business in ways that capitalize on market opportunities or further strengthen our competitive position, such as the global broadband opportunity. And fourthly, over the longer term, considering returning capital to shareholders as appropriate.

我們強大的資產負債表和財務表現為 Gogo 提供了前所未有的策略和財務靈活性。在先前的電話會議中，我們表示將奉行平衡的資本配置策略，重點在於以下四個主要領域，並依優先順序排列。首先是透過部署 Gogo 5G 來增強我們的網路。二是將整體槓桿率降低到適當的經營水準。第三是對我們的業務進行策略性投資，以利用市場機會或進一步加強我們的競爭地位，例如全球寬頻機會。第四，從長遠來看，考慮酌情向股東返還資本。

We have made considerable progress on the first 2 of these with Gogo 5G on track and on budget and the natural deleveraging that has occurred on an accelerated basis with a stronger-than-expected operating performance. We are now in a position to more actively consider the latter 2 priorities. Over the coming quarters, we will continue to assess value-creating investment opportunities like the LEO-based global broadband opportunity. We will then be in a position to begin considering the potential timing of returning capital to shareholders in the context of a targeted capital structure.

我們在前兩項方面取得了相當大的進展，Gogo 5G 已步入正軌並符合預算，自然去槓桿加速，營運績效強於預期。我們現在能夠更積極地考慮後兩個優先事項。在未來幾個季度，我們將繼續評估創造價值的投資機會，例如基於 LEO 的全球寬頻機會。然後，我們將能夠開始考慮在目標資本結構的背景下向股東返還資本的潛在時機。

With that, I'll provide some additional color on our updated financial guidance. As we announced in our press release this morning, we expect our full year revenue to come in at the high end of the $325 million to $335 million range we had previously communicated. We also raised our 2021 adjusted EBITDA guidance to a range of $140 million to $145 million versus at least $130 million as we previously expected. This guidance excludes approximately $2 million of separation and migration costs related to the sale of the CA division.

至此，我將為我們更新的財務指引提供一些額外的資訊。正如我們今天早上在新聞稿中宣布的那樣，我們預計全年收入將達到我們先前溝通的 3.25 億美元至 3.35 億美元區間的高端。我們也將 2021 年調整後 EBITDA 指引上調至 1.4 億至 1.45 億美元，而我們先前預期的至少為 1.3 億美元。該指南不包括與出售 CA 部門相關的約 200 萬美元的分離和遷移成本。

In terms of free cash flow, we now anticipate generating at least $40 million in free cash flow for the 2021 fiscal year compared to the $25 million to $30 million to which we have previously guided. And finally, given the Gogo 5G spend dynamics I spoke to earlier, we now anticipate 2021 capital expenditures at the low end of our $20 million to $25 million range. While we plan to provide full year 2022 guidance on our next earnings call, as we normally do, we thought it would be helpful to offer some high-level perspectives as we finish out 2021 and look forward to 2022.

在自由現金流方面，我們現在預計 2021 財年將產生至少 4,000 萬美元的自由現金流，而我們先前的指導目標為 2,500 萬至 3,000 萬美元。最後，考慮到我之前談到的 Gogo 5G 支出​​動態，我們現在預計 2021 年的資本支出將在 2000 萬美元至 2500 萬美元範圍的低端。雖然我們計劃像往常一樣在下一次財報電話會議上提供 2022 年全年指引，但我們認為在結束 2021 年並展望 2022 年時提供一些高層次的觀點會有所幫助。

We continue to expect significant top line growth. However, we want to be clear that we don't expect our bottom line to continue to grow at the pace we are delivering in 2021. For one, we will not have the approximately $4 million onetime benefit as we did in 2020 with the deferred revenue recognition in USF surcharge credit. We expect service and equipment margins to contract somewhat next year and we will be significantly ramping investments to deploy our Gogo 5G network. In addition, Gogo will be returning to more normalized post-Covid spending on sales and marketing, particularly as we continue to commercialize Gogo 5G. And we anticipate that meeting the significant growth in advanced unit shipments expected in 2022 will require some investments in working capital.

我們繼續預計收入將顯著增長。然而，我們希望明確的是，我們預計我們的利潤不會繼續以 2021 年實現的速度成長。其一，我們將不會像 2020 年那樣透過 USF 附加費抵免中的遞延收入確認獲得約 400 萬美元的一次性福利。我們預計明年服務和設備利潤將有所收縮，並且我們將大幅增加投資以部署 Gogo 5G 網路。此外，Gogo 將在銷售和行銷方面恢復更正常化的疫情支出，特別是在我們繼續將 Gogo 5G 商業化的情況下。我們預計，要滿足 2022 年先進單位出貨量的顯著成長，將需要一些營運資本投資。

Over the longer term, we continue to drive towards the long-term financial targets for revenue growth, adjusted EBITDA margin and free cash flow we announced in late September, which remain unchanged. As a reminder, the long-term financial targets are as follows: revenue growth at a compounded annual growth rate of approximately 15% from 2020 to 2025, annual adjusted EBITDA margin reaching 45% in 2025. Adjusted EBITDA margin may decline modestly from the higher-than-expected level achieved this year due to the investments we described for next year, for example, but our target of 45% in 2025 remains unchanged. Free cash flow of approximately $125 million in 2023 following the deployment of the Gogo 5G network in 2022. And approximately $200 million in 2025.

從長遠來看，我們將繼續推動我們在 9 月底宣布的營收成長、調整後 EBITDA 利潤率和自由現金流等長期財務目標，這些目標保持不變。需要提醒的是，長期財務目標如下：2020年至2025年營收年複合成長率約為15%，2025年調整後的年度調整後EBITDA利潤率達到45%。例如，由於我們所描述的明年投資，調整後的 EBITDA 利潤率可能會比今年實現的高於預期的水平略有下降，但我們 2025 年 45% 的目標保持不變。2022 年部署 Gogo 5G 網路後，2023 年自由現金流約 1.25 億美元。2025 年約 2 億美元。

In conclusion, our business is really hitting its stride leveraging our unique competitive advantages to capitalize on the positive trends driving growth in the attractive, underpenetrated BA market. Our equipment shipments and supply chain strengths continue to derisk our long-term financial projections as more aircraft come online and feed the virtuous circle that creates value for our customers, shareholders and employees.

總而言之，我們的業務確實正在大步前進，利用我們獨特的競爭優勢，利用積極的趨勢推動有吸引力的、滲透率較低的 BA 市場的成長。隨著越來越多的飛機上線並形成良性循環，為我們的客戶、股東和員工創造價值，我們的設備運輸和供應鏈優勢繼續降低我們的長期財務預測風險。

Before we turn the call over for your questions, I'd like to thank the Gogo team for the outstanding performance we delivered this quarter again. Our continuing progress, including reaching the exciting milestone of achieving positive net income, is a testament to the hard work of our talented team. So thank you. Operator, this concludes our prepared remarks, and we're now ready for our first question.

在我們轉交您的問題之前，我要再次感謝 Gogo 團隊本季的出色表現。我們的持續進步，包括實現正淨利潤這一激動人心的里程碑，證明了我們才華橫溢的團隊的辛勤工作。所以謝謝。接線員，我們準備好的發言到此結束，現在我們準備好回答第一個問題。

(Operator Instructions) Your first question comes from the line of Phil Cusick from JPMorgan.

（操作員說明）您的第一個問題來自摩根大通的 Phil Cusick。

This is Amir for Phil. I wanted to know when you look at your 2022 goal for the 5G launch, where are the puts and takes into hitting that? And how does the supply chain kind of look today for that? And then in addition to that, another one, if I may. Are you guys -- can you confirm that you're seeing revenues from that Intelsat agreement? And should that ramp as airlines start to kind of come back and flight counts go up?

這是阿米爾對菲爾的稱呼。我想知道，當您考慮 2022 年 5G 發布的目標時，實現這一目標的投入和成本有哪些？如今的供應鏈又是怎麼樣的呢？除此之外，如果可以的話，還有另一件事。你們能確認你們看到了來自 Intelsat 協議的收入嗎？隨著航空公司開始回歸並且航班數量增加，這種增長是否應該增加？

Thanks, Amir. I'll take the first part and let Barry deal with the Intelsat part. I wouldn't say that we have any puts and takes on when we're going to deliver. We're very confident in delivering the second half of 2022. As you know, we had a 5G chip issue. That's been resolved. That's being delivered on schedule. That was a 6-month delay in that chip, but we actually managed the project to still stay on schedule, and we're very confident in that. And the other, the second part of that question was supply chain. In terms of supply chain, we are in very good shape. We have secured all the supply, all parts required to meet our commitments this year and for the first quarter next year and second quarter next year.

謝謝，阿米爾。我將處理第一部分，然後讓巴里處理國際通訊衛星部分。我不會說當我們要交付時我們有任何投入和承擔。我們對 2022 年下半年的業績充滿信心。如您所知，我們遇到了 5G 晶片問題。已經解決了。正在按計劃交付。該晶片延遲了 6 個月，但我們實際上管理該項目仍然按計劃進行，我們對此非常有信心。另一個問題的第二部分是供應鏈。在供應鏈方面，我們的狀況非常好。我們已經確保了履行今年、明年第一季和明年第二季承諾所需的所有供應和所有零件。

And for Q3 and Q4 next year, we have secured all parts needed to meet our current projections of 25% unit growth. If we are actually putting demand into our systems now for greater than 25% unit growth in case, we see a similar surge in orders as we have this year, next year. And so we still are a bit yellow on that surge in additional demand if that occurs in Q3, Q4, but we're working that down. And I think we feel pretty confident we could handle it. And then we are ordering already -- we're ordering 18 months ahead right now in order to secure supply. And so we're now actually placing orders for demand for 2023. So we're feeling pretty good about that, and I think we performed really well in that area.

對於明年第三季和第四季度，我們已經獲得了滿足當前 25% 單位成長預測所需的所有零件。如果我們現在確實將需求投入到我們的系統中，以實現超過 25% 的單位成長，那麼我們將看到與今年和明年類似的訂單激增。因此，如果第三季、第四季出現額外需求激增，我們仍然有點黃色，但我們正在努力減少這種情況。我認為我們非常有信心能夠處理好它。然後我們已經在訂購了——我們現在提前 18 個月訂購，以確保供應。因此，我們現在實際上正在根據 2023 年的需求下訂單。所以我們對此感覺非常好，我認為我們在該領域表現得非常好。

As far as 5G itself, most of the supply right now is around the network and the actual equipment to run the network. That's coming in right now on schedule in terms of the airborne equipment. That's all on the certification process right now. But we don't see a lot of -- any supply issues there is that we are -- we have very focused vendors, I'll put it that way, 3 very good vendors who are supplying us on that project and there are no alarm bells whatsoever. Remember, it also leverages a lot of the same componentry that we use for our AVANCE L5 and L3 products. So the supply chain is pretty consistent across 5G and AVANCE. We feel good.

就5G本身而言，目前大部分供應都是圍繞網路和運行網路的實際設備。就機載設備而言，現在正在按計劃進行。這就是現在認證過程的全部內容。但我們沒有看到很多——任何供應問題——我們有非常專注的供應商，我會這樣說，3 個非常好的供應商為我們的項目提供供應，但沒有無論如何都要敲響警鐘。請記住，它還利用了許多與我們的 AVANCE L5 和 L3 產品相同的組件。因此，5G 和 AVANCE 的供應鏈非常一致。我們感覺很好。

And Amir, on your second question regarding the Intelsat revenue, yes, that is on track. As a reminder, we have a 10-year contract with them and the amount of the minimums grow over time to total $177 million over that 10-year period. We are on track for that, and there is a step-up in that rev share amount as the 5G deployment takes place.

阿米爾，關於你關於國際通訊衛星收入的第二個問題，是的，這正在步入正軌。提醒一下，我們與他們簽訂了為期 10 年的合同，並且最低金額隨著時間的推移而增加，在這 10 年期間總計達到 1.77 億美元。我們正在朝著這個目標邁進，隨著 5G 部署的進行，收益份額將會增加。

Your next question comes from the line of Scott Searle from ROTH Capital.

您的下一個問題來自羅斯資本 (ROTH Capital) 的 Scott Searle。

Nice quarter. Thanks for the color as always. Just a real quick clarification. Looking to '22, talking about 20% plus unit growth. It sounds like you've got the supply chain well in order. I'm wondering what you have in terms of visibility to order coverage at this point in time and kind of how that breaks down when you think about the attach rate on new aircraft coming off versus retrofits? And then I had a couple follow-ups.

不錯的季度。一如既往地感謝您的顏色。只是一個真正的快速澄清。展望 22 年，單位成長率約 20% 以上。聽起來你們的供應鏈井然有序。我想知道您目前對訂單覆蓋範圍的可見性如何，以及當您考慮新飛機與改裝飛機的附加率時，這種情況是如何分解的？然後我進行了一些後續行動。

Yes, I'll take the beginning of that. And right now, about 6% of our units are committing to our aftermarket and about 40% line-fit. And that's been kind of a skew we've seen develop here as I think we get more penetration in older aircraft in the market. So that is a trend we would anticipate to continue. Barry, do you want to talk about the order flow?

是的，我將從這裡開始。目前，我們約 6% 的設備致力於售後市場，約 40% 是線上安裝。這是我們在這裡看到的一種偏差，因為我認為我們在市場上的舊飛機上獲得了更多的滲透。因此，我們預計這種趨勢將持續下去。Barry，你想談談訂單流程嗎？

Yes. In terms of the orders, Scott, we have a strong backlog, actually the highest we've had in our company's history. And the lead times are a bit longer than where they had been. They normally run from the time that somebody -- [something] to shipment 1 to 2 months. Those are stretching out closer to 6 months now as the demand has so significantly stripped our previous expectations. But so we're now taking orders to be delivered in the May time frame. But with the supply chain work, we're continuing to work that down and expect to be able to return to those shorter lead times over time. But it's really based on the booming demand for the equipment that we've seen.

是的。斯科特，就訂單而言，我們有大量積壓訂單，實際上是我們公司歷史上最高的。而且交貨時間比以前還要長。他們通常從某人--[某物]發貨到發貨需要 1 到 2 個月。由於需求大大超出了我們先前的預期，這些時間現在已經延長了近 6 個月。但我們現在接受的訂單將在五月的時間內交付。但透過供應鏈工作，我們正在繼續努力降低這一點，並期望隨著時間的推移能夠恢復到更短的交貨時間。但這實際上是基於我們所看到的設備需求的蓬勃發展。

Great. Very helpful. And lastly, if I could. Looking at the equipment gross margins are very high at 40%, but then you start to talk about how AVANCE is growing both for the L3 and the L5 and then the low churn rates that translates to basically aircraft 18 years in the field and what you can do with the AVANCE in terms of the easy upgrade to 5G. So basically, you're securing that customer. So I'm wondering how you're thinking about being more aggressive on the AVANCE front because that really locks in your customer effectively for the next 10 to 15-plus years. If you accelerate that, do you get more aggressive on the gross margin or if you don't have to at this point in time simply because of the supply-demand balance within the industry? And also, as part of that, I'm kind of wondering what you think the overall installation capacity from an industry standpoint is in 2022?

偉大的。很有幫助。最後，如果可以的話。看看設備的毛利率非常高，達到40%，但隨後你開始談論AVANCE 在L3 和L5 方面的成長情況，然後是低流失率，這意味著飛機基本上已經在該領域工作了18 年，你會看到什麼？AVANCE 可以輕鬆升級到 5G。所以基本上，您正在保護該客戶。所以我想知道您如何考慮在 AVANCE 方面更加積極主動，因為這確實可以在未來 10 到 15 年以上有效地鎖定您的客戶。如果你加速這一進程，你會在毛利率上變得更加激進，還是僅僅因為行業內的供需平衡而暫時不必這樣做？另外，我想知道您認為從行業角度來看 2022 年的整體安裝容量是多少？

Yes. I'll jump in at the start of that. I mean, driving AVANCE penetration for all the reasons you mentioned, Scott, is a central pillar of our strategy. And right now, frankly, yes, we don't need to drive a lot more orders just because there are some supply chain constraints. We are trying to manage ourselves to -- well, first of all, we have managed ourselves to 25% unit growth above this year next year. And we are actually trying to now make sure we can satisfy demand in case it's greater than that. We do -- we have in our guidance -- you talked about lower equipment margins over the next couple years, and that is built in partly in order to take account of incentives we might create in order to get people to upgrade from the classic products to AVANCE products.

是的。我會從一開始就介入。我的意思是，出於史考特你提到的所有原因，推動 AVANCE 滲透是我們策略的核心支柱。現在，坦白說，是的，我們不需要僅僅因為存在一些供應鏈限製而增加更多訂單。我們正在努力管理自己——嗯，首先，我們已經設法使明年的單位成長率比今年高出 25%。我們現在實際上正在努力確保我們能夠滿足需求，以防需求大於這個數字。我們確實 - 我們在我們的指導中 - 您談到了未來幾年設備利潤率較低，這在一定程度上是為了考慮我們可能創造的激勵措施，以讓人們從經典產品升級AVANCE 產品。

And the one thing I would add to what you mentioned is benefits of AVANCE is because of its multi-bearer capabilities, we think that we could add a global broadband LEO product relatively easily as an add-on to that, which we think gives us add-on advantage in our space and is a way we can fend off potential other satellite competitors coming into our space. So yes, getting people to move in AVANCE is a major thrust. It's growing about 46% this year, which is great. We hope that by the end of next year, it's 50% of our -- roughly 50% of our installed base and growing, and we're going to keep driving that.

我要補充的一件事是 AVANCE 的好處是因為它的多承載能力，我們認為我們可以相對容易地添加全球寬頻 LEO 產品作為附加產品，我們認為這給了我們這是我們在太空中的附加優勢，也是我們抵禦潛在其他衛星競爭對手進入我們太空的一種方式。所以，是的，讓人們在 AVANCE 中移動是一個主要推動力。今年成長了約 46%，這非常棒。我們希望到明年年底，它占我們安裝基礎的 50%——大約 50%，並且還在不斷增長，我們將繼續推動這一趨勢。

And Scott, to your question on the margins, yes, as you know, the service margin is really the driver of the overall economics and accounts for about 90% of the gross margin dollars. So that's really the factor that drives the value creation for Gogo. And in terms of the margins on equipment, they were high this quarter. As we've said, we expect those to come down even as we launch Gogo 5G, because it's very much worth it to us to invest in driving the conversion to 5G and also driving the AVANCE penetration because for all the reasons talked about. So as we get more AVANCE products online, it adds to the stickiness of the customers, it future-proof enables the upgrade as we described. So -- but even as we see those equipment gross margin percentages compressing somewhat over the next couple years, it's very good for the overall business model.

Scott，對於你關於利潤的問題，是的，如你所知，服務利潤確實是整體經濟的驅動力，約佔毛利率的 90%。所以這確實是推動 Gogo 創造價值的因素。就設備利潤而言，本季很高。正如我們所說，即使我們推出 Gogo 5G，我們預計這些數字也會下降，因為對於我們來說，投資推動 5G 轉換並推動 AVANCE 滲透率是非常值得的，因為出於所討論的所有原因。因此，當我們在網路上獲得更多 AVANCE 產品時，它會增加客戶的黏性，它面向未來，能夠實現我們所描述的升級。因此，儘管我們看到這些設備的毛利率百分比在未來幾年有所壓縮，但這對整體商業模式來說非常有利。

Yes. Then in terms of the MRO capacity, I think there's plenty of MRO capacity to go -- to install. I don't think that's really an issue. Another thing is that you have to be a compelling product for the MROs to sell, that's something that they make money on and that makes their customers happy. And right now, we're really in the catbird seat on that and the distributors are very happy with their relationships with Gogo. So that's the way to keep another sort of weapon and driving that penetration. And that, right now, we don't really see that as a limiting factor.

是的。然後就 MRO 能力而言，我認為還有大量的 MRO 能力可以安裝。我不認為這真的是一個問題。另一件事是，你必須成為 MRO 銷售的引人注目的產品，這是他們賺錢的東西，也是讓客戶滿意的東西。現在，我們在這方面確實處於有利地位，經銷商對他們與 Gogo 的關係感到非常滿意。這就是保留另一種武器並推動滲透的方法。目前，我們並不真正認為這是一個限制因素。

Your next question comes from the line of Rick Prentiss from Raymond James.

您的下一個問題來自雷蒙德詹姆斯 (Raymond James) 的里克普倫蒂斯 (Rick Prentiss)。

This is Brent on for Rick. ED&D came in a little bit lower than expected this quarter. Were there any deferred costs within that category or one-timers? And how should we think about that trending going forward?

這是瑞克的布倫特。本季 ED&D 的業績略低於預期。該類別或一次性費用中是否存在任何遞延費用？我們該如何看待未來的趨勢？

Yes. It did come in a little bit lower. There were a couple of reasons, some of which we pointed out. One was that we were able to capitalize more of the cost than we had previously anticipated because of having crossed the technical feasibility proof and milestones for the global 5G products. So that certainly helped. There was a couple of million dollars that will be deferred, some of which will be deferred into next year. So we do expect ED&D spending to ramp in the next quarter as we continue to invest in the Gogo 5G product.

是的。它確實有點低。有幾個原因，我們指出了其中一些原因。一是我們能夠利用比之前預期更多的成本，因為已經跨越了全球 5G 產品的技術可行性證明和里程碑。所以這確實有幫助。有幾百萬美元將被推遲，其中一些將推遲到明年。因此，隨著我們繼續投資 Gogo 5G 產品，我們預計下季 ED&D 支出將會增加。

Got it. And then my other question is, you guys have talked about some of these new markets that could provide upside to your expectations, general aviation and international and connectivity to the cockpit. Just could you provide an update on where you're most encouraged? And which of these markets you think could provide the most upside to your long-term expectations?

知道了。我的另一個問題是，你們談到了一些新市場，這些市場可以為您的期望提供上行空間，通用航空和國際以及與駕駛艙的連接。您能提供您最受鼓勵的最新情況嗎？您認為下列哪些市場可以為您的長期預期提供最大的上行空間？

Yes, I'll take that. The -- I think the one that would have the most upside would be the global broadband initiative. However, that's still in the business case stage, and we have not formed any -- formal relationships with external parties or gotten board approval to move ahead with that. That's something we'll talk about in more detail when we get there. Where we're having the most success right now, of course, is moving down market. And by that, I mean into smaller aircraft, that's both general aviation aircraft like the Cirrus Vision Jet and small business aircraft like the HondaJet STCs we announced a couple weeks ago.

是的，我會接受的。我認為最有好處的是全球寬頻計劃。然而，這仍處於商業案例階段，我們尚未與外部各方建立任何正式關係，也沒有獲得董事會批准繼續進行這項工作。當我們到達那裡時，我們將更詳細地討論這一點。當然，我們目前最成功的地方是邁向低端市場。我指的是小型飛機，既包括 Cirrus Vision Jet 等通用航空飛機，也包括我們幾週前宣布的 HondaJet STC 等小型商務飛機。

So right now, we're having good success. We're in an area where it's hard for our competitors to compete, and that is an aircraft that require small form factors like our AVANCE L3, and we're going to keep driving that. And we keep looking at other ways we can modify our products to further drive penetration there. The 2 big things were -- so far have been the small form factor L3 and then the lowering of the flight floor or altitude floor from getting connectivity to 3,000 feet because smaller planes tend to fly shorter routes and not get over 10,000 very often.

所以現在，我們取得了巨大的成功。我們正處於競爭對手難以競爭的領域，而這需要像我們的 AVANCE L3 這樣的小型飛機，我們將繼續推動這一趨勢。我們一直在尋找其他方法來修改我們的產品，以進一步推動在那裡的滲透。到目前為止，最重要的兩件事是L3 外形較小，然後將飛行樓層或高度樓層從連接高度降低到3,000 英尺，因為較小的飛機往往飛行較短的航線，並且經常不會超過10,000 英尺。

So -- but there's other things we can do that we're working on to further drive that. So those would be the 2 big ones. But [GGV], by far, the biggest, that would drive -- probably wouldn't start driving revenue until the second half of the decade, but would we think accelerate our growth dramatically for the second half of the decade.

所以，但我們還可以做其他事情來進一步推動這個目標。所以這將是兩個大問題。但是 [GGV]，到目前為止，最大的，可能要到本世紀後半葉才會開始推動收入，但我們認為會在本世紀後半葉大幅加速我們的成長。

Your next question comes from the line of Louie DiPalma from William Blair.

你的下一個問題來自威廉布萊爾的路易迪帕爾瑪。

Great. Have you been able to test the bonding of your licensed 4 megahertz of 850 megahertz band spectrum with the unlicensed 60 megahertz of WiFi spectrum? And have the results been positive? Does the bonding work?

偉大的。您是否能夠測試 850 兆赫頻段的許可 4 兆赫頻段頻譜與未許可 60 兆赫 WiFi 頻譜的綁定？結果是正面的嗎？黏合有效嗎？

Yes. It's actually aggregation, not bonding. There's an engineering difference between the 2 of them. That's actually -- we right now have our first end-to-end all the way aircraft through tower equipment to data center setup, and we're testing that right now, Louie. So more to come on that in the next call.

是的。它實際上是聚合，而不是結合。它們兩者之間存在工程差異。事實上，我們現在擁有第一架端到端的飛機，從塔式設備到資料中心設置，我們現在正在測試它，Louie。下一次電話會議將討論更多內容。

Great. And Oak, you also mentioned how the existing AVANCE system will easily support future LEO broadband antennas and systems. Will AVANCE also support the new Iridium Certus L-band service? And are you still working on developing your own Iridium Certus antennas?

偉大的。Oak，您也提到現有的 AVANCE 系統將如何輕鬆支援未來的 LEO 寬頻天線和系統。AVANCE 是否也支援新的 Iridium Certus L 波段服務？您還在致力於開發自己的 Iridium Certus 天線嗎？

It could support Certus or any other -- with a new antenna, just like the LEO. The LEO installation was required to get a antenna. We're not a Certus dealer, I don't think. So we have -- we still sell a lot of Iridium product, and we have plans around what I'll call the narrow band that I don't think we're really ready to talk about yet. So -- but that would not add a lot of bandwidth for us like LEOs would. So we're not focused on that.

它可以支援 Certus 或任何其他設備——使用新天線，就像 LEO 一樣。需要安裝 LEO 才能獲得天線。我不認為我們是 Certus 經銷商。因此，我們仍然銷售大量銥產品，我們有圍繞我所說的窄帶的計劃，我認為我們還沒有真正準備好談論它。所以——但這不會像低地軌道那樣為我們增加大量頻寬。所以我們不關注這一點。

Right. And one final one, financially for Barry. Even with this quarter's upside, do you still project that your 2022 revenue growth will be at the upper end of your 10% to 15% long-term guidance growth range?

正確的。最後一項是巴里的經濟問題。即使本季出現上漲，您是否仍預期 2022 年的營收成長將位於 10% 至 15% 的長期指導成長範圍的上限？

Well, we're actually going to increase the expectations for service revenue growth saying that we expect it to be 15% each year compounding from '22 forward. So yes, we do expect it to be up at that 15% range for next year.

嗯，我們實際上會提高對服務收入成長的預期，預計從 22 年開始，每年的複合成長率將達到 15%。所以，是的，我們確實預計明年的漲幅將達到 15%。

Your next question comes from the line of Jonnathan Navarrete from Cowen.

您的下一個問題來自考恩 (Cowen) 的喬納森·納瓦雷特 (Jonnathan Navarrete)。

Jonnathan in for Lance. Congrats on the quarter. My first question is what are the trends that the company is seeing in terms of unit expansion and pricing into the fourth quarter? And perhaps any viewpoint on how the beginning of 2022 would look in terms of unit expansion and pricing?

喬納森替換蘭斯。恭喜本季。我的第一個問題是，公司第四季在單位擴張和定價方面看到的趨勢是什麼？也許您對 2022 年初的單位擴張和定價有何看法？

Barry, do you want to take it?

巴里，你想接受嗎？

You're talking, Jonnathan, about basically what we see happening in the ARPU over time. That's your question in the fourth quarter and going forward?

喬納森，你所說的基本上是我們所看到的 ARPU 隨著時間的推移而發生的情況。這是你在第四季和未來的問題嗎？

Right. Like what are the trends that you're seeing right now and what we can expect in '22 -- the beginning of it at least.

正確的。就像你現在看到的趨勢是什麼，以及我們對 22 年的預期——至少是開始。

Yes. Just to put it in context, our ARPU has grown over the last number of years. And a big part of that is people have this insatiable demand for more bandwidth that they are upgrading plans. So we have seen that and expect that to continue going forward. As you look at the longer term, there are kind of two upward pressures on ARPU and one downward pressure, but also for a good reason. Two upward pressures are the continued migration to higher value, higher megabyte plans, which we have seen, including the addition of the full streaming plans. So we expect that trend to continue as people want to consume more megabytes. The second uplift is from Gogo 5G. And so we are confident that we're going to be able to charge more for Gogo 5G because of the increased performance. So those 2 things will lift ARPU over time.

是的。簡而言之，我們的 ARPU 在過去幾年中一直在成長。其中很大一部分原因是人們對更多頻寬的需求不斷增加，以至於他們正在升級計劃。所以我們已經看到了這一點，並預計這種情況會繼續下去。從長遠來看，ARPU 有兩種上行壓力和一種下行壓力，但也是有充分理由的。兩個向上的壓力是持續遷移到更高價值、更高兆位元組的計劃，我們已經看到了這一點，包括添加完整的串流媒體計劃。因此，隨著人們想要消耗更多兆字節，我們預計這種趨勢將持續下去。第二個提升來自Gogo 5G。因此，我們有信心，由於性能的提高，我們將能夠對 Gogo 5G 收取更高的費用。因此，隨著時間的推移，這兩件事將會提升 ARPU。

The downward pressure is as we get into the light jet turboprop market. As we talked about, those planes, as you know, fly shorter routes. The average revenue per user tends to be lower as a result. But very, very importantly, the revenue for megabyte is comparable to the other. So it's a very quality business, but that will have a dampening effect on ARPU going forward. But as we go forward from this point over the longer term, we expect ARPU to continue to increase.

當我們進入輕型噴射渦輪螺旋槳飛機市場時，下行壓力就出現了。正如我們所討論的，如您所知，這些飛機飛行的航線較短。因此，每個用戶的平均收入往往會較低。但非常非常重要的是，兆位元組的收入與其他收入相當。因此，這是一項非常優質的業務，但這將對未來的 ARPU 產生抑製作用。但從長遠來看，我們預計 ARPU 將繼續成長。

Understood. That's very helpful. And just 2 more on my end. How many L5s were installed during the quarter? And the last one is, in terms of the 15% revenue CAGR from 2020 to '25, what percent of the market share does that imply?

明白了。這非常有幫助。我這邊還有 2 個。本季安裝了多少台 L5？最後一個問題是，從 2020 年到 25 年的 15% 收入複合年增長率來看，這意味著市場份額的百分比是多少？

Yes. On the -- Oak, do you want to take the second part of that question on how we see unit volume market share growing over time.

是的。關於 Oak，您是否想回答該問題的第二部分，即我們如何看待單位體積市場份額隨著時間的推移而增長。

Yes, I'll take that and then we'll pick up the data point on installs. We don't really look at market share as an internal measure, to be honest. It's more something that investors are concerned with. We focus on unit growth and growth in the number of service plans we have and pricing of those service plans. So there is a lot of room in this market if there are other entrants. 70% roughly of the market is unpenetrated today. And frankly, we project -- we've shared our projections through the end of '25. And at the end of '25, assuming success of a potential ATG entrant and assuming that our GEO competitors succeed on their plans and continue their current growth trajectories, the 50% of the market is still unpenetrated in 2025. So there's enough white space for everybody and some market share isn't what we focus on as much as is unit growth and our own growth.

是的，我會接受，然後我們將取得安裝資料點。老實說，我們並沒有真正將市場佔有率視為一種內部衡量標準。這是投資者更關心的事情。我們專注於單位增長和我們擁有的服務計劃數量的增長以及這些服務計劃的定價。因此，如果有其他進入者，這個市場還有很大的空間。如今，大約 70% 的市場尚未被滲透。坦白說，我們預測——我們已經分享了到 25 年底的預測。到 25 年底，假設潛在的 ATG 進入者取得成功，並假設我們的 GEO 競爭對手成功實現其計劃並繼續其當前的成長軌跡，那麼到 2025 年，50% 的市場仍未被滲透。因此，每個人都有足夠的空白空間，我們關注的不是一些市場份額，而是單位成長和我們自己的成長。

And then to answer your question, Jonnathan, about the shipments, there were 139 shipped in the last quarter.

然後回答你的問題，喬納森，關於發貨量的問題，上個季度發貨了 139 台。

That shipment, because I think he was asking about installs. In total, there are 244 AVANCE platforms shipped. You gave the L5 number. I don't have the install number handy, but it would be simply the growth in units online for L5.

那批貨物，因為我認為他問的是安裝情況。AVANCE 平台總共出貨 244 個。你給了L5號碼。我手邊沒有安裝數量，但這只是 L5 線上單位的成長。

Yes, 107 units online growth for L5.

是的，L5 在線上成長了 107 台。

Your next question comes from the line of Chris Sakai from Singular Research.

您的下一個問題來自 Singular Research 的 Chris Sakai。

I have a question on your marketing spend. You recently talked about you're going to increase it going forward. And I wanted to see -- do you have a metric state of your spend per new customer? And how is that going to increase in the near term?

我對你們的行銷支出有疑問。您最近談到您將繼續增加它。我想看看—你們是否有每個新客戶的支出的衡量標準？短期內這數字將如何增加？

Marketing spend was artificially low during COVID for obvious reasons. It didn't make sense to do marketing during that period of time, really. So marketing spend is coming back up. We see it remaining relatively constant as a percentage of revenue going forward, but it will grow as the overall top line grows. And as we look to 2022, as we mentioned, we expect the marketing spend to grow during that year as we, one, normalize it back to those levels. But secondly, as we invest in marketing and promoting the exciting Gogo 5G product.

出於顯而易見的原因，在新冠疫情期間，行銷支出被人為壓低。那段時間做行銷確實沒有意義。因此，行銷支出正在回升。我們認為它在未來收入中所佔的百分比保持相對穩定，但它會隨著整體收入的增長而增長。正如我們所提到的，展望 2022 年，我們預計行銷支出將在這一年成長，因為我們將其正常化回這些水準。其次，我們投資於行銷和推廣令人興奮的 Gogo 5G 產品。

Yes. And I would say...

是的。我想說...

Okay, great. And then for -- when would you expect L3 sales to really pick up and maybe become higher than L5 sales?

好的，太好了。然後，您預計 L3 銷量何時會真正回升並可能高於 L5 銷量？

We don't necessarily see them getting higher than L5, but they certainly have picked up. And when you look at the relative percentages of L3 versus L5, if you go back a couple years ago, it was about half the number of L3s versus L5s and now it's over 80%. So we see that ratio continuing to grow, but we also expect L5s to be very strong going forward, and particularly because you have the upgrade capability directly from L5 to Gogo 5G, for example. Oak, did you want to add something there?

我們不一定會看到它們高於 L5，但它們肯定有所回升。當你看到 L3 與 L5 的相對百分比時，如果你回到幾年前，L3 與 L5 的數量大約是 L3 與 L5 數量的一半，而現在已經超過 80%。因此，我們看到該比率繼續增長，但我們也預計 L5 未來將非常強勁，特別是因為您具有直接從 L5 升級到 Gogo 5G 的能力。奧克，你想在那裡添加一些東西嗎？

Yes. We do see L3 sales to be projected, they will narrow with L5 sales over the 4-year plan. They don't quite reach that level, though, the L5 level.

是的。我們確實預計 L3 的銷量將在 4 年計劃中隨著 L5 的銷量而縮小。不過，他們還沒有完全達到 L5 等級。

There are no further questions at this time. I'll turn it over back to William Davis.

目前沒有其他問題。我會把它轉回給威廉戴維斯。

Thank you, Nika, and thank you, everyone, for joining our third quarter conference call. This call has now concluded, and you may disconnect.

謝謝尼卡，也謝謝大家參加我們的第三季電話會議。此通話現已結束，您可以中斷連線。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。