GoPro(GPRO)2025-05-12 20:58Financial Performance - Revenue for Q1 2025 was $134.3 million, a decrease of 13.6% compared to $155.5 million in Q1 2024[18]. - Gross profit for Q1 2025 was $43.1 million, down from $53.0 million in Q1 2024, reflecting a gross margin decline[18]. - Operating loss for Q1 2025 was $45.2 million, compared to a loss of $41.4 million in Q1 2024[18]. - Net loss for Q1 2025 was $46.7 million, significantly improved from a net loss of $339.1 million in Q1 2024[18]. - Adjusted EBITDA for Q1 2025 was negative $15.7 million, an improvement from negative $29.3 million in Q1 2024[174]. - Total revenue for the three months ended March 31, 2025, was $134.3 million, a decrease of 13.6% compared to $155.5 million for the same period in 2024[147]. - Revenue declined by 13.6% in the three months ended March 31, 2025, compared to the same period in 2024, resulting in operating losses of $45.2 million[213]. Cash and Liquidity - Cash and cash equivalents decreased to $69.6 million as of March 31, 2025, down from $102.8 million at the end of 2024[15]. - Operating cash outflows for Q1 2025 were $57.2 million, compared to $98.4 million in Q1 2024[21]. - The Company estimates it will maintain liquidity for at least 12 months, but future cash generation is uncertain due to factors like inflation and competition[37]. - As of March 31, 2025, the company's cash balances were $27.3 million, down from $60.4 million as of December 31, 2024[64]. - The company drew $25.0 million from its 2021 Credit Agreement in February 2025, with an additional $19.8 million available to draw[32]. Assets and Liabilities - Total assets decreased to $462.5 million as of March 31, 2025, compared to $543.7 million at the end of 2024[15]. - Total liabilities were $352.5 million as of March 31, 2025, down from $392.0 million at the end of 2024[15]. - The carrying amount of goodwill as of March 31, 2025, was $133.8 million, down from $152.4 million due to an impairment of $18.6 million[79]. - The company reported accrued expenses and other current liabilities of $78.5 million as of March 31, 2025, a decrease of approximately 29% from $110.8 million as of December 31, 2024[80]. Revenue Breakdown - Subscription and service revenue was $26.9 million, or 20.0% of total revenue for Q1 2025, compared to $25.9 million, or 16.7% for Q1 2024[46]. - Revenue from the Americas region was $81.9 million, up 6.5% from $76.6 million in the prior year, while revenue from EMEA and APAC regions decreased by 22.9% and 54.1%, respectively[147]. - Retail revenue in Q1 2025 was $93.9 million, representing 69.9% of total revenue, compared to 68.4% in Q1 2024[171]. - GoPro.com revenue, including subscription and service revenue, was $40.4 million in Q1 2025, accounting for 30.1% of total revenue[171]. Operational Changes - The Company has implemented restructuring actions in 2024 to maintain liquidity and operations, including headcount reductions and managing working capital[36]. - The company reduced its global workforce by 25% as part of its restructuring plans, which included significant severance costs[152]. - The operational plan for 2025 includes reducing research and development costs and sales and marketing expenses[36]. - The restructuring charges for the first quarter of 2025 totaled $2.43 million, an increase from $2.21 million in the first quarter of 2024[151]. Market and Competition - The company continues to face pressures from inflation and fluctuating interest rates, which may impact pricing and consumer spending[167]. - Camera units shipped in Q1 2025 decreased by 2.0% year-over-year to 385 thousand, compared to 393 thousand in Q1 2024[171]. - Average selling price in Q1 2025 decreased by 11.8% year-over-year to $349[189]. Goodwill and Impairment - The company recorded a goodwill impairment of $18.6 million in Q1 2025[18]. - The Company recognized a goodwill impairment charge of $18.6 million due to a decline in market capitalization, with no impairment recorded in 2024[40]. Tax and Legal Matters - The company recorded an income tax expense of $1.7 million on a pre-tax net loss of $45.1 million for the three months ended March 31, 2025, compared to an income tax expense of $298.2 million on a pre-tax net loss of $40.9 million in 2024[124][125]. - As of March 31, 2025, the company's gross unrecognized tax benefits were $28.8 million, with $12.8 million of these benefits potentially reducing income tax expense if recognized[127]. - The company anticipates an initial ruling in July 2025 regarding its patent infringement complaint against Arashi Vision Inc.[139]. Stock and Financing - The Company has authorized a total of $140.0 million for stock repurchases, with $60.4 million remaining as of March 31, 2025[102][103]. - The company may require additional financing to execute its business strategy, which may not be available on favorable terms[37]. - The 2025 Notes mature on November 15, 2025, unless repurchased or converted into shares of Class A common stock[207].