Core Viewpoint - Reddit has filed a lawsuit against Perplexity for allegedly scraping user posts to train its AI model, highlighting ongoing tensions between content owners and the AI industry [1][3]. Group 1: Allegations and Defendants - Reddit claims that Perplexity, along with three other entities, illegally extracted its copyrighted content by disguising their identities and web scrapers [2]. - The defendants named in the lawsuit include Oxylabs, AWMProxy, and SerpApi, which Reddit accuses of assisting in the data collection process [1][2]. Group 2: Industry Context - This lawsuit is part of a broader trend where content owners are taking legal action against AI firms for using copyrighted material without permission to train large language models [3]. - Reddit has previously initiated a similar lawsuit against AI startup Anthropic, indicating its proactive stance in protecting its content [3]. Group 3: Reddit's Position and Strategy - Reddit's Chief Legal Officer stated that AI companies are engaged in an "arms race for quality human content," leading to a "data laundering" economy where scrapers steal data to sell to clients [4]. - The lawsuit claims that user posts from Reddit have become a primary source for AI-generated answers on Perplexity, with citations increasing forty-fold after a cease-and-desist letter was sent [5]. Group 4: Licensing Agreements - Reddit has been leveraging its data pool by allowing access only through AI-related licensing agreements, having signed deals with OpenAI and Alphabet's Google [6]. - Perplexity argues that it does not train AI models on Reddit content but merely summarizes public discussions, claiming that licensing agreements are therefore unnecessary [6][7]. Group 5: Financial Implications - AI licensing deals with Google and OpenAI reportedly account for nearly 10% of Reddit's revenue, emphasizing the financial significance of data licensing for the company [8].

Financial Data and Key Metrics Changes - In Q2 2025, revenue reached $153 million, which is 6% higher than the midpoint of guidance of $145 million [18] - Gross margin improved to 36% compared to 30.7% in Q2 2024, marking a significant increase [18][20] - Non-GAAP operating expenses were $63 million, a 32% reduction year over year [18][20] - Adjusted EBITDA improved 83% year over year to negative $6 million [18] - Non-GAAP EPS net loss per share improved from negative $0.24 in Q2 2024 to negative $0.08 in Q2 2025 [18] Business Line Data and Key Metrics Changes - Revenue from the retail channel was $111 million, accounting for 73% of total revenue, compared to 74% in 2024 [19] - Revenue from the GoPro.com channel, including subscription and service revenue, was $41 million, representing 27% of total revenue, up from 26% in 2024 [19] - Subscription attach rate from cameras sold across all channels was 56%, a 24% improvement from 45% in Q2 2024 [10][19] Market Data and Key Metrics Changes - The action camera market remains strong, with GoPro being the U.S. market leader in the estimated 3 million unit category [15] - The 360 camera segment is estimated to be nearly 2 million units annually, with GoPro planning to regain market share with the launch of the Max 2 [16] - The low light capable camera segment represents a significant opportunity, estimated at 2 to 2.5 million units annually [16] Company Strategy and Development Direction - GoPro's priorities for the remainder of 2025 and into 2026 include managing operating expenses, protecting intellectual property, and launching new products [7][15] - The company aims to return to unit and revenue growth and improved profitability starting in Q4 2025 [7][15] - GoPro is also exploring new revenue streams, including monetizing user-generated content for AI model training [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are becoming choosier with their spending, but demand for GoPro products remains stable [32] - Tariffs are impacting gross margins, but the company is managing this with modest price increases [33] - The company is optimistic about upcoming product launches and their potential to drive unit growth and profitability [33][35] Other Important Information - GoPro raised $50 million in debt financing to strengthen its balance sheet ahead of repaying $94 million in convertible debt due in November [7] - The company refreshed its Board of Directors with three new executives to enhance strategic and financial governance [14] - GoPro's liquidity position is expected to be strong, with an estimated $80 million in cash by the end of 2025 [27] Q&A Session Summary Question: Consumer spending intentions and market conditions - Management indicated that consumers are becoming choosier, but demand for GoPro products remains stable, particularly among professional and aspiring content creators [32][33] Question: MAX camera market and competition - GoPro previously held a 90% market share in the 360 camera market, but competition has increased since the last MAX camera launch in 2019 [40] - The market for 360 cameras has grown significantly, presenting a large opportunity for GoPro with the upcoming Max 2 launch [40][41]