GoPro(US:GPRO)2020-05-07 20:59Revenue 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].