GoPro, Inc. (NASDAQ:GPRO) Q1 2024 Earnings Conference Call May 7, 2024 5:00 PM ET Company Participants Chris Clark - VP, Corporate Communications Nicholas Woodman - CEO Brian McGee - CFO and COO Conference Call Participants Andrew Uerkwitz - Oppenheimer Operator Hello and welcome to the GoPro First Quarter 2024 Earnings Call. My name is Lauren, and I'll be coordinating your call today. There will be opportunity to questions at the end of the presentation. [Operator Instructions] I would now hand you over ou ...

GoPro (GPRO) came out with a quarterly loss of $0.21 per share versus the Zacks Consensus Estimate of a loss of $0.24. This compares to loss of $0.18 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 12.50%. A quarter ago, it was expected that this action video camera maker would post earnings of $0.03 per share when it actually produced earnings of $0.02, delivering a surprise of -33.33%.Over the last four quarters, the company ...

Financial Performance - Revenue for the three months ended March 31, 2024, was $155.469 million, a decrease of 11% compared to $174.720 million in the same period of 2023[17]. - Gross profit for the quarter was $53.038 million, slightly up from $52.502 million year-over-year[17]. - Net loss for the quarter was $339.088 million, significantly higher than the net loss of $29.869 million in the same quarter of 2023[17]. - The company reported a basic and diluted net loss per share of $2.24 for the quarter, compared to $0.19 in the same quarter of 2023[17]. - For the three months ended March 31, 2024, subscription and service revenue was $25.9 million, representing 16.7% of total revenue[25]. - GoPro's total deferred revenue as of March 31, 2024, was $58.4 million, slightly down from $59.1 million as of December 31, 2023[25]. - GoPro reported a net loss of $339.1 million for the three months ended March 31, 2024, compared to a net loss of $29.9 million in the same period of 2023, resulting in a basic and diluted net loss per share of $(2.24) compared to $(0.19) in 2023[59]. - The company recorded an income tax expense of $298.2 million for the three months ended March 31, 2024, primarily due to a valuation allowance on deferred tax assets, compared to an income tax benefit of $8.3 million in the same period of 2023[62]. Assets and Liabilities - Total current assets decreased to $369.509 million from $482.591 million as of December 31, 2023[13]. - Cash and cash equivalents at the end of the period were $133.658 million, down from $222.708 million at the beginning of the period[19]. - Total liabilities decreased to $350.843 million from $412.105 million as of December 31, 2023[14]. - The company's cash and cash equivalents decreased to $46.4 million as of March 31, 2024, down from $69.9 million as of December 31, 2023, a decline of 33.5%[30]. - GoPro's total cash equivalents as of March 31, 2024, were $87.2 million, down from $152.8 million as of December 31, 2023, a decrease of 42.8%[30]. - The company reported a total of $27.3 million in other long-term assets as of March 31, 2024, significantly down from $311.5 million as of December 31, 2023, a decline of 91.2%[35]. - GoPro's accrued expenses and other current liabilities decreased to $89.3 million as of March 31, 2024, from $110.0 million as of December 31, 2023, a reduction of 18.7%[40]. - The warranty liability as of March 31, 2024, was $7.0 million, down from $7.2 million as of December 31, 2023, indicating a decrease of 2.8%[42]. Research and Development - Research and development expenses increased to $44.612 million from $38.185 million year-over-year, indicating a focus on innovation[17]. Inventory and Sales - Inventory increased to $131.252 million from $106.266 million as of December 31, 2023, suggesting potential challenges in sales[13]. - As of March 31, 2024, GoPro's total inventory increased to $131.3 million from $106.3 million as of December 31, 2023, representing a 23.5% increase[33]. - Revenue from sales arrangements with multiple performance obligations is allocated based on relative standalone selling prices, with revenue recognized upon transfer of control[25]. - Revenue from the Americas was $76.6 million, down from $89.5 million year-over-year, while EMEA revenue increased to $52.0 million from $46.0 million[76]. Acquisitions and Investments - GoPro completed the acquisition of Forcite Helmet Systems for a total consideration of $14.0 million, with $7.5 million allocated to developed technology and $5.9 million to residual goodwill[28]. - The gross carrying value of purchased technology increased by $7.5 million due to the acquisition of Forcite Helmet Systems[38]. Stock and Equity - The stock repurchase program authorized up to $140 million, with $60.4 million remaining as of March 31, 2024[47]. - The average price per share for stock repurchases in the three months ended March 31, 2023, was $5.62, totaling $5.0 million[48]. - As of March 31, 2024, the Company had 2,586 thousand stock options outstanding with a weighted average exercise price of $8.13[51]. - The Company has implemented a new 2024 Equity Incentive Plan effective February 15, 2024, succeeding the 2014 Plan[49]. - The 2024 Employee Stock Purchase Plan allows eligible employees to purchase shares at 85% of the fair market value[49]. - GoPro's total unearned stock-based compensation as of March 31, 2024, was $51.8 million, expected to be recognized over a weighted-average period of 2.32 years[57]. - The company had 25.7 million potentially dilutive shares not included in the diluted shares calculation for the three months ended March 31, 2024, compared to 29.9 million in 2023[61]. Restructuring and Charges - The company recorded restructuring charges of $2.3 million related to severance in Q1 2024, with an expected impairment charge of approximately $3.2 million for ceasing the use of certain office space[80]. - The company anticipates approximately $2.1 million of office space charges through January 2027 as part of its restructuring plan[80]. Market and Credit Risk - GoPro's cash and cash equivalents are held with high-credit-quality financial institutions, with balances exceeding FDIC insurance limits, indicating a concentration of credit risk[70]. - GoPro has not entered into any foreign currency exchange contracts or derivatives to manage foreign currency risk, which primarily involves the Euro, British pound, and other currencies[137]. Other Financial Metrics - The estimated fair value of GoPro's single reporting unit exceeded its carrying value by 34% as of March 31, 2024, based on market capitalization[24]. - GoPro's market capitalization declined from $2.23 on March 31, 2024, to a low of $1.69 on April 22, 2024, affecting the fair value assessment[24]. - The Company continues to monitor its forecasts and market capitalization to assess potential goodwill impairment charges[24]. - The estimated fair value of the 2025 Convertible Senior Notes was $85.6 million as of March 31, 2024, compared to $82.3 million as of December 31, 2023, reflecting an increase of 4.0%[31]. - The Company issued $125.0 million in 1.25% Convertible Senior Notes due 2025, with a total issuance of $143.8 million after over-allotments[45]. - The outstanding principal on the 2025 Notes was $93.8 million as of March 31, 2024, with an effective interest rate of 0.5%[46]. - The Company repurchased $50.0 million of the 2025 Notes for $46.3 million in November 2023, recognizing a gain of $3.1 million[46]. - The Company has a revolving credit facility of up to $50.0 million under the 2021 Credit Agreement, with an outstanding letter of credit of $5.2 million as of March 31, 2024[43][44]. - As of March 31, 2024, the Company could borrow up to $44.8 million under the 2021 Credit Agreement, with no borrowings made to date[44].

Financial Performance (Q1 2024) - Revenue was $155.5 million[7], with GoPro.com contributing $49.2 million[8], representing 31.6% of the total revenue[8] - Non-GAAP gross margin was 34.4%[7, 25] - Non-GAAP operating expenses were $83.3 million[7, 25] - Non-GAAP operating loss was $29.9 million[7, 25] - Non-GAAP net loss was $31.7 million[7, 22], resulting in a diluted net loss per share of $0.21[7, 23] - Adjusted EBITDA was a loss of $29.3 million[7, 27] Revenue Channels (Q1 2024) - GoPro.com revenue comprised $49.2 million[8], which is 31.6% of total revenue[8] - Retail channel revenue was $106.3 million[8], accounting for 68.4% of total revenue[8] GoPro.com Revenue Breakdown (Q1 2024) - Hardware revenue through GoPro.com was $23.3 million[8], representing 47.4% of GoPro.com revenue[8] - Subscription and service revenue from GoPro.com was $25.9 million[8], accounting for 52.6% of GoPro.com revenue[8]

EXHIBIT 99.1 GoPro Announces First Quarter Results Revenue of $155 million was 7% Above Guidance GoPro Subscribers Grew 6% Year-over-Year to 2.5 million Subscription and Service Revenue was $26 million, up 12% Year-over-Year SAN MATEO, Calif., May 7, 2024 - GoPro, Inc. (NASDAQ: GPRO) announced financial results for its first quarter ended March 31, 2024 and posted management commentary, including forward-looking guidance, in the investor relations section of its website at https://investor.gopro.com. "GoPro ...

Group 1: Company Performance - Peloton and GoPro have both experienced significant stock declines, with GoPro down approximately 85% from its peak in 2021 [1] - Peloton's revenue is heavily reliant on subscriptions, with nearly 60% coming from this source, while GoPro's subscriptions account for about 13% of its total revenue [5][6] - Peloton is currently facing financial difficulties, including significant losses and recent layoffs, while GoPro has been operating near breakeven for several years [7] Group 2: Business Model Shifts - Both companies are transitioning towards subscription-based models to stabilize revenue, with Peloton offering an online workout service and GoPro providing storage and editing tools [4] - Peloton's app subscriptions have seen a decline, with a 21% year-over-year drop in the fiscal third quarter of 2024, indicating challenges in its new business model [5] - GoPro's subscriber base grew by 12% year-over-year in the fourth quarter of 2023, demonstrating a more successful transition to subscriptions compared to Peloton [6] Group 3: Market Position and Future Outlook - GoPro's subscription service shows strong renewal rates, with first-year rates around 60% and third-year rates approximately 80%, indicating customer retention [6] - Peloton's core business appears stagnant, while its new subscription model struggles to gain traction, raising concerns about its future growth [5] - Investors may prefer GoPro over Peloton due to its relatively stronger financial position and more successful subscription efforts, despite both companies being high-risk options [8]

Discovered through 'GoPro Grom Quest' Talent Search ProgramSAN MATEO, Calif., April 23, 2024 /PRNewswire/ -- Today, GoPro (NASDAQ: GPRO) announced the addition of eight young athletes to its elite team of professional athletes.The athletes, ranging from 9 to 17 years old, were selected through GoPro's Grom Quest Challenge, a video-submission-based talent search designed to identify the next generation of top action sports athletes. GoPro Grom Quest Challenge winner, Jaydin Smart, age 10 Grom Quest part ...

GoPro is taking steps to get back on track.GoPro (GPRO 1.99%) stock is trading at an all-time low and is down 60% in the past year. It's been a challenging period for the action-camera maker as it attempts to reach profitable growth.Results for 2023 disappointed investors. Revenue of $1 billion was down 8% year over year. Management said intense competition forced the company to lower pricing. This directly impacted margins and led to a $32 million adjusted net loss last year.The GoPro subscription business ...

"The GoPro Mountain Games are such an awesome way to kick off summer in the mountains, whether you're competing in the events, strolling around the village or taking in the evening concerts," says Rick Loughery, GoPro's Vice President of Global Marketing and Communications. "And GoPro's cameras and software are the perfect solutions to capture and share these experiences." "The GoPro stoke from the event attendees is unmatched and we're excited to continue working with VVF in the years to come," Loughery ad ...

The Official Action Camera of MotoGP to Deliver Thrilling Content from Every Grand Prix Event Throughout MotoGP's 2024 SeasonSAN MATEO, Calif., April 3, 2024 /PRNewswire/ -- GoPro, Inc. (NASDAQ: GPRO) today announced title sponsorship of the MotoGP™ Gran Premio GoPro de Aragon motorcycle race weekend to be held at the MotorLand racetrack in Alcañiz, Spain, August 31 – September 1, 2024. On-site fans and customers will have opportunities to interact with GoPro products and staff throughout the race weekend. ...