GoPro(US:GPRO)2020-02-14 21:07Financial 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].