GoPro, Inc. (NASDAQ:GPRO) Citi's 2020 Global Technology Virtual Conference September 9, 2020 6:00 PM ET Company Participants Brian McGee - CFO Nicholas Woodman - CEO Conference Call Participants Jim Suva - Citi Jim Suva Hello, and welcome, everyone. Thank you for joining us here on Day 2 of Citi Technology's - our Citi Investment Research Global Technology Conference. I'm Jim Suva. I'm in charge of the IT hardware and technology supply chain analyst. I'm very pleased to bring to you in this fireside present ...

GoPro, Inc. (NASDAQ:GPRO) BMO 2020 Virtual Technology Summit Conference Call August 25, 2020 3:30 PM ET Company Participants Brian McGee - Executive Vice President, Chief Financial Officer and Chief Operating Officer Nicholas Woodman - Chairman and Chief Executive Officer Conference Call Participants Patrick Kratus - BMO Capital Markets Patrick Kratus Hi, everybody. Welcome to the GoPro Presentation. I'm Pat Kratus. I cover the technology and business services practice here at BMO. This is actually a very e ...

Financial Data and Key Metrics Changes - GoPro's revenue for Q2 2020 was guided to be between $220 million to $250 million, representing a 40% increase in revenue growth on gopro.com from Q2 [12][34] - The company expects gross margins to rebound to approximately 35% in Q3 and 38% in Q4, following a dip due to low revenue in Q1 and Q2 [17][34] - The company anticipates being close to breakeven for the year, with a potential for slight profitability [34] Business Line Data and Key Metrics Changes - Demand for GoPro cameras improved across all regions, with significant sales from the HERO8 Black model, which outpaced other models [11][14] - The company reported that 95% of sales were from products priced at $300 and above, indicating a shift towards higher-margin products [14][18] Market Data and Key Metrics Changes - GoPro's direct-to-consumer sales accounted for 44% of revenue in Q2, with expectations to maintain a range of 36% to 40% in Q3 [12][34] - The company saw a consistent improvement in sell-through rates globally, matching prior year levels by the end of June [11][12] Company Strategy and Development Direction - GoPro is focusing on a direct-to-consumer model to reduce operating costs and improve margins, which has shown positive results despite the pandemic [7][8] - The company plans to launch new hardware, software, and subscription offerings in the second half of 2020, aiming for continued growth in earnings [8][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for GoPro products, with expectations for continued growth into Q3 and Q4 [11][34] - The company is adapting well to the pandemic, with effective remote work practices and a robust product roadmap [25][34] Other Important Information - GoPro is expanding its product offerings to include lifestyle products and accessories, which are expected to contribute positively to average selling prices [27][30] - The company is enhancing its subscription service, GoPro Plus, with plans to increase the number of subscribers significantly by the end of the year [37][39] Q&A Session Summary Question: Improvement in demand by region - Management noted improvements in demand across all regions, with North America, EMEA, and Asia all showing positive trends [11] Question: Breakdown of demand by camera type - The HERO8 Black was the top performer, with 95% of sales coming from products priced at $300 and above [14] Question: Impact of direct-to-consumer on forecasting - Management indicated that forecasting has improved due to better data from retailers and direct sales [20][22] Question: New product development timeline amid COVID - Management confirmed that new product launches are on schedule, with effective remote work practices in place [24][25] Question: Free cash flow and guidance - The company expects to end Q3 with approximately $130 million in cash, with a potential for profitability [34] Question: GoPro Plus subscription attach rate - The attach rate for GoPro Plus is higher when customers purchase directly from gopro.com, and management plans to enhance this offering [35][37] Question: Webcam feature feedback - The webcam functionality for HERO8 Black has received positive feedback, with plans to enhance live streaming capabilities [41][60] Question: Inventory levels and future expectations - Management indicated that inventory levels are expected to stabilize around 500,000 to 600,000 units by the end of the year [49][50] Question: Fourth quarter competitive environment - Management acknowledged the competitive landscape but emphasized the advantages of the direct-to-consumer model in providing value to customers [57][58]

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Revenue Performance - Revenue for Q1 2020 was $119.4 million, a 50.8% decrease year-over-year from $242.7 million in Q1 2019[82]. - Revenue for Q1 2020 was $119.4 million, a 50.8% decrease year-over-year from $242.7 million in Q1 2019, primarily due to the COVID-19 pandemic[89]. Camera Shipments - Camera units shipped in Q1 2020 were 341 thousand, down 60% from 842 thousand in Q1 2019[81]. - Camera units shipped in Q1 2020 were 341 thousand, down 60% from 842 thousand in Q1 2019[89]. Financial Losses - Net loss for Q1 2020 was $63.5 million, or $0.43 per share, compared to a net loss of $24.4 million, or $0.17 per share, in Q1 2019[82]. - For the three months ended March 31, 2020, GoPro reported a net loss of $63.528 million, compared to a net loss of $24.365 million in the same period of 2019[116]. - Adjusted EBITDA for Q1 2020 was negative $41.4 million, compared to negative $1.0 million in Q1 2019[82]. - Adjusted EBITDA for the same period was $(41.356) million, significantly worse than $(1.035) million in the prior year[116]. - Non-GAAP net loss for Q1 2020 was $(49.613) million, compared to $(10.171) million in Q1 2019, indicating a deterioration in operational performance[117]. Operating Expenses - Operating expenses in Q1 2020 were $94.5 million, a decrease of $6.1 million year-over-year[82]. - Total operating expenses for Q1 2020 were $94.5 million, representing 79% of revenue, compared to $100.6 million or 41% of revenue in Q1 2019[87]. - Research and development expenses decreased by 14% year-over-year to $32.3 million in Q1 2020, accounting for 27% of revenue[92]. - Sales and marketing expenses decreased by 8% year-over-year to $43.5 million in Q1 2020, representing 36.4% of revenue[93]. - Total general and administrative expenses increased by $2.9 million, or 18%, in Q1 2020 compared to Q1 2019, reaching $18.8 million[94]. Market Impact - The COVID-19 pandemic negatively impacted revenue and inventory levels in Q1 2020[82]. - The company anticipates continued uncertainty regarding the impact of COVID-19 on financial performance[78]. Pricing and Sales Strategy - Average selling price in Q1 2020 increased to $351, a 21.7% increase year-over-year[82]. - Average selling price increased by 21.7% year-over-year to $351 in Q1 2020, driven by a higher proportion of cameras sold at or above $300[89]. - Nearly 90% of camera revenue in Q1 2020 came from cameras sold at or above $300[82]. - The direct sales channel accounted for 54.3% of revenue in Q1 2020, up from 45.7% in Q1 2019, reflecting a strategic shift towards direct-to-consumer sales[89]. - The company expects to increase sales from gopro.com relative to total revenue, as direct-to-consumer sales historically have a higher gross margin[103]. Cash Flow and Financing - Cash, cash equivalents, and marketable securities totaled $124.9 million as of March 31, 2020, down from $165.1 million at the end of 2019[99]. - Cash used in operating activities was $68.3 million in Q1 2020, primarily due to a net loss of $63.5 million and changes in working capital[106]. - Cash provided by investing activities was $6.1 million, mainly from maturities of marketable securities totaling $7.3 million[107]. - Cash provided by financing activities was $29.9 million, resulting from a $30.0 million draw on the Credit Facility[108]. Restructuring and Workforce - The company plans to reduce its global workforce by approximately 20% as part of a restructuring plan announced in April 2020[103]. - GoPro's restructuring actions have significantly reduced operating expenses, particularly in marketing and sales, in response to the COVID-19 pandemic[86]. - The company recorded restructuring charges of $23.1 million under a restructuring plan approved in March 2017, which included a workforce reduction of approximately 17%[95]. Tax and Other Expenses - Income tax expense for Q1 2020 was $2.4 million, a 535% increase from $378,000 in Q1 2019, resulting in a negative effective tax rate of 3.9%[98]. - Total other expense, net, increased by $1.3 million in Q1 2020 compared to Q1 2019, primarily due to a $0.8 million increase in net foreign exchange rate-based transaction losses[97]. - Stock-based compensation expenses amounted to $7.637 million in Q1 2020, down from $9.785 million in Q1 2019[117]. - Acquisition-related costs for Q1 2020 were $1.887 million, slightly lower than $2.082 million in the same quarter of 2019[117]. Market Risk - The fair value of GoPro's Senior Convertible Notes is influenced by interest rate risk and market risk, particularly due to the convertible feature[119]. - There were no material changes to market risk during the three months ended March 31, 2020, aside from risks associated with the COVID-19 pandemic[119]. - GoPro utilizes a cash-based non-GAAP tax expense approach for evaluating operating performance, which may differ from other companies' calculations[115]. - The company emphasizes that non-GAAP financial measures provide meaningful supplemental information regarding operational performance[115].

Financial Performance - The company experienced its highest revenue levels in the fourth quarter, particularly during the holiday shopping season, with direct sales accounting for 46% of total revenue in 2019[18][23]. - As of January 31, 2020, the company had over 334,000 paying subscribers for its GoPro Plus subscription service, although revenue from this service was not material to overall results[17]. - The company expects to maintain operating expenses at a similar level in 2020 as in 2019, focusing on operational excellence and predictability[13]. Market Presence - The company operates in over 100 countries and sells through more than 30,000 retail outlets, with gopro.com contributing more than 10% of total revenue in 2019[23][24]. - The company has approximately 29,000 point-of-purchase displays in retail outlets worldwide as of December 31, 2019[27]. - GoPro gained 4.3 million new followers on social media in 2019, reaching a total of 42.8 million followers across platforms[28]. Product Development - The company has a user experience-driven approach to product development, with a focus on innovative features and performance enhancements[21]. - The company competes against established brands like Canon and Nikon, emphasizing its durable product design and professional-grade features at attractive price points[29]. - The company moved most of its U.S.-bound camera production from China to Mexico in 2019 due to tariff-related concerns[22]. Corporate Structure and Workforce - GoPro had 926 employees as of December 31, 2019, with no employees covered by collective bargaining agreements and no work stoppages reported[33]. - The company has experienced no work stoppages and maintains a stable workforce without collective bargaining agreements[33]. - The company has implemented three company-wide restructurings since Q4 2016, resulting in a reduction of global workforce and the elimination of high-cost initiatives[13]. Intellectual Property and Financial Management - As of December 31, 2019, GoPro held approximately 682 issued patents and 441 pending patent applications in the United States, along with 314 issued patents and 193 pending applications in foreign countries[32]. - GoPro's trademarks, including "GOPRO" and "HERO," are critical components of its business value, with ongoing efforts to protect intellectual property against unauthorized use[32]. - GoPro's cash equivalents and marketable securities primarily consist of money market funds, commercial paper, U.S. treasury securities, and corporate debt securities, with a focus on preserving principal and providing liquidity[180]. Currency and Market Risks - The company has not entered into any material foreign currency exchange contracts, and believes that a 10% shift in exchange rates would not materially affect its results of operations[180]. - GoPro's operations outside the U.S. hold foreign denominated cash balances and incur expenses in various foreign currencies, but the exposure to foreign currency fluctuations is currently considered immaterial[180]. - The fair value of GoPro's Senior Convertible Notes is influenced by interest rate risk and market risk, but changes do not impact the company's financial position or cash flows due to the fixed nature of the debt obligation[180]. Company Background - The company was incorporated in California in 2004 and completed its initial public offering in July 2014, with its Class A common stock listed on The Nasdaq Global Select Market under the symbol "GPRO"[34]. - GoPro's principal executive offices are located in San Mateo, California, and the company provides access to its filings with the SEC through its website[36].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number: 001-36514 GOPRO, INC. (Exact name of registrant as specified in its charter) Delaware 77-0629474 (State o ...

Financial Performance - Revenue for Q2 2019 was $292.4 million, a 3.4% increase year-over-year from $282.7 million in Q2 2018[89] - Net loss for Q2 2019 was $11.3 million, or $0.08 per share, an improvement of $26.0 million compared to Q2 2018[89] - Adjusted EBITDA for Q2 2019 was $13.6 million, an improvement of $22.3 million from negative $8.7 million in Q2 2018[89] - Operating loss for Q2 2019 was $(6,947) thousand, compared to $(30,836) thousand in Q2 2018[93] - Net loss for Q2 2019 was $(11,287) thousand, or (4)% of revenue, compared to $(37,269) thousand, or (13)% in Q2 2018[93] - The company reported a net loss of $11.3 million for the three months ended June 30, 2019, compared to a net loss of $24.4 million for the previous quarter[121] - Adjusted EBITDA for the three months ended June 30, 2019, was $13.6 million, compared to an adjusted EBITDA of $(1.0) million for the previous quarter[120] - Non-GAAP net income for the three months ended June 30, 2019, was $4.2 million, with a non-GAAP income per share of $0.03[121] Revenue and Sales - Total revenue for Q2 2019 was $292,429 thousand, a 3% increase from $282,677 thousand in Q2 2018[94] - The HERO7 Black camera accounted for over 85% of camera revenue in Q2 2019[89] - Average selling price in Q2 2019 increased to $270, a 2% increase year-over-year[89] - Direct channel revenue decreased by 7% to $135,351 thousand in Q2 2019, while distribution channel revenue increased by 14% to $157,078 thousand[94] - Average selling price of cameras increased by 7% to $270 in Q2 2019 compared to the same period in 2018[94] Cost and Expenses - Gross margin in Q2 2019 was 34.9%, up from 29.5% in Q2 2018, representing a 540 bps improvement[89] - Total cost of revenue for Q2 2019 was $190,244 thousand, a 5% decrease from $199,308 thousand in Q2 2018[95] - Operating expenses in Q2 2019 were $109.1 million, a decrease of $5.1 million year-over-year[89] - Total operating expenses for Q2 2019 were $109,132 thousand, a decrease from $114,205 thousand in Q2 2018[93] - Total sales and marketing expenses decreased by $8.1 million, or 13%, in Q2 2019 compared to Q2 2018, primarily due to a $7.6 million decrease in advertising expenses[98] - General and administrative expenses increased by $2.5 million, or 16%, in Q2 2019 compared to Q2 2018, driven by a $1.1 million increase in allocated facilities and other overhead expenses[100] Research and Development - Research and development expenses for Q2 2019 were $38,811 thousand, representing 13.3% of revenue, a slight increase from 13.5% in Q2 2018[97] - The company plans to continue investing in research and development to enhance customer experience and product offerings[90] Market and Growth Opportunities - International markets are viewed as a significant growth opportunity despite the overall decline in the digital camera market[90] Cash and Liquidity - Total cash, cash equivalents, and marketable securities decreased by $67.4 million, or 34.1%, from $197.5 million as of December 31, 2018, to $130.1 million as of June 30, 2019[107] - The percentage of total assets represented by cash, cash equivalents, and marketable securities decreased from 28% as of December 31, 2018, to 19% as of June 30, 2019[105] - The company expects its cash, cash equivalents, and marketable securities, along with amounts available under its credit facility, to be sufficient for at least the next 12 months[109] - Operating activities resulted in a cash outflow of $66.0 million for the six months ended June 30, 2019, primarily due to an adjusted net loss of $7.8 million and a net cash outflow of $73.9 million from changes in operating assets and liabilities[112] - Cash provided by investing activities was $5.0 million in the first half of 2019, resulting from maturities of marketable securities of $37.2 million, partially offset by purchases of marketable securities of $30.2 million[113] - Cash used in financing activities was $0.1 million in the first half of 2019, primarily due to $4.0 million in tax payments for net RSU settlements[114] Debt and Financing - The company issued $175.0 million in Convertible Senior Notes with a 3.50% interest rate, maturing on April 15, 2022[108] - The company has a secured revolving credit facility of up to $250.0 million, which terminates in March 2021, with no borrowings made to date[109] Other Financial Information - The company recorded an income tax benefit of $0.6 million for Q2 2019 on a pre-tax net loss of $11.9 million, resulting in an effective tax rate of 5.1%[104] - Total other expense, net, decreased by $0.8 million in Q2 2019 compared to Q2 2018, attributed to a decrease in unrealized losses from foreign exchange rates[103] - The company incurred restructuring costs of $563,000 in Q2 2019, a 43% increase compared to Q2 2018[100] - Total general and administrative expenses for the first half of 2019 decreased by $1.2 million, or 3%, compared to the first half of 2018[100] - There have been no material changes to the company's market risk during the six months ended June 30, 2019[123]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number: 001-36514 GOPRO, INC. (Exact name of registrant as specified in its charter) Delaware 77-0629474 (State or ot ...