Speaker/ Date/ Subtitle Investor Presentation May 23, 2025 Copyright © 2025. GoPro, Inc. All rights reserved. Copyright © 2025. GoPro, Inc. All rights reserved. Safe harbor statement Our values define and align us Make friends Collaborate and include. Strength in numbers. Obsessively serve Put consumer interest first. Harness the power of WOW Exceed expectations. Stay agile Be willing to adapt and commit. Be a HERO Take responsibility. Integrity, always. This presentation may contain projections or other fo ...

Core Viewpoint - GoPro, Inc. reported a narrower non-GAAP loss per share of 12 cents for Q1 2025, which was better than the consensus estimate of a 13-cent loss, indicating a focus on operational efficiency and long-term growth despite a decline in revenues [1][4]. Financial Performance - Revenues for Q1 2025 were $134.3 million, down 13.6% year over year, primarily due to lower accessory sales and increased price promotions, although subscription and service revenues partially offset this decline [2][3]. - The company sold 440,000 camera units in Q1 2025, an 18% decrease from the previous year [5]. - Subscription revenues increased by 4% year over year to $27 million, driven by improved retention rates, with aggregate retention rates reaching 70% [6]. - Non-GAAP gross margin was 32.3%, down from 34.4% in the prior year, while non-GAAP operating loss was $18.7 million, an improvement from a loss of $29.9 million a year ago [8][10]. Operational Efficiency - Operating expenses decreased to $62 million from $83.3 million in the prior year, reflecting the company's strategic focus on cost management [8][13]. - Management expressed confidence that upcoming product launches in late 2025 and 2026 will support a return to revenue and profitability growth [4]. Market Dynamics - The retail channel generated $94 million in revenues, a 12% decline year over year, while revenues from GoPro.com fell 18% to $40 million [7]. - Regionally, revenues from the Americas increased by 7%, while Europe, the Middle East, and Africa saw a 23% decline, and Asia Pacific revenues dropped by 54% [7]. Future Guidance - For Q2 2025, GoPro estimates revenues of $145 million and a non-GAAP adjusted loss of 7 cents per share, with a gross margin forecast of 35.5% [12]. - The company anticipates lower unit sales and revenues for 2025 compared to 2024 due to macroeconomic uncertainties and increased competition, but expects some offset from favorable foreign exchange effects [14][15].

Industry Overview - The Zacks Audio Video Production industry focuses on the premium segment of branded products for growth, with key players like Sony, Dolby, and GoPro benefiting from investments in advanced technology solutions [1] - The industry includes manufacturers of televisions, speakers, video players, camcorders, gaming consoles, drones, and high-end cameras, enhancing entertainment and communication experiences [2] Trends Impacting the Industry - Technological advancements, such as the shift to digital technology and wireless transmission, are driving growth by catering to high-resolution video demands and improving productivity [3] - There is an increasing demand for premium entertainment, with strong growth expected from record labels, TV producers, and advertisers, supported by a direct-to-consumer model [4] Economic Challenges - Global macroeconomic uncertainties, including trade tensions and inflation, are likely to restrain consumer spending, particularly on discretionary purchases [5] - The industry faces aggressive competition from low-priced imports, particularly from countries like China, Vietnam, and Mexico, leading to price wars and margin contraction [6] Industry Performance and Valuation - The Zacks Audio Video Production industry ranks 3 within the Zacks Consumer Discretionary sector, indicating bright near-term prospects [7][8] - The industry has outperformed the S&P 500, with a growth of 31.2% over the past year compared to the S&P 500's 5.4% [11] - The industry has a trailing 12-month price-to-sales (P/S) ratio of 1.51X, significantly lower than the S&P 500's 5.07X and the sector's 2.05X [14] Company Highlights - **GoPro**: Focused on subscription revenue growth, with a retention rate of 69% and 2.52 million subscribers. The company aims to enhance its subscription service and improve operational efficiencies, projecting a significant reduction in operating expenses [19][20][21] - **Sony Group Corporation**: Expected to grow through its Game & Network Services segment, with a projected revenue growth of 8% and operating income growth of 31% for the current year. The company has raised its fiscal 2024 sales outlook to ¥13,200 billion [24][26][27][28] - **Dolby Laboratories**: Gaining from the adoption of Dolby Atmos and Dolby Vision, with strategic acquisitions like GE Licensing expected to enhance its revenue and operating margins. The Zacks Consensus Estimate for its fiscal 2025 earnings is $4.06 per share [31][35][36]