GoPro(US:GPRO)2024-05-07 21:04Financial 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].