SAN MATEO, Calif., Feb. 6, 2019 /PRNewswire/ -- GoPro, Inc.
(NASDAQ: GPRO) announced financial results for its fourth quarter
and full year ended December 31,
2018.
"Thanks to a strong product line-up and efficient execution,
GoPro grew both camera unit sell-through and market share in 2018,
resulting in GAAP profitability in the fourth quarter and second
half of the year," said founder and CEO Nicholas Woodman. "With this momentum and a
continued focus on expense management, we're planning for growth
and profitability in 2019."
Recent GoPro Highlights
- Revenue for Q4 2018 was $377
million, up 13% year-over-year.
- GAAP gross margin for Q4 2018 was 38%, up from 32% in the
prior quarter. Non-GAAP gross margin for Q4 2018 was 38%, up
from 33% in the prior quarter.
- Q4 2018 GAAP net income was $32
million, or $0.22 per
share. Non-GAAP net income was $42
million, or $0.30 per share.
On a year-over-year basis, GAAP net income increased by
$88 million.
- GoPro reduced Q4 2018 GAAP and non-GAAP operating expenses
by $29 million and $22 million, a year-over-year reduction of 21%
and 18%, respectively.
- Cash and investments totaled $198
million at the end of Q4 2018.
- Revenue for the full year 2018 was approximately
$1.15 billion, down 3%
year-over-year. Excluding our aerial business, revenue would have
increased 3% year-over-year.
- GoPro.com represented more than 10% of revenue in Q4 2018,
growing more than 50% year-over-year.
- In the US, GoPro captured 97% dollar share and 87% unit
share of the action camera category in Q4 2018. The top-five
cameras sold by unit volume were GoPro cameras, and GoPro's three
HERO7 cameras were the top-three selling action cameras according
to the NPD Group.
- In the US, Fusion captured 38% dollar share of the spherical
camera market in Q4 2018 according to the NPD Group.
- In Europe, in the
$199 and above price band, GoPro held
91% unit share and 90% dollar share in Q4 2018, up from 83% and
84%, respectively, year-over-year. Four out of the top-five cameras
sold by unit volume were GoPro cameras according to GfK.
- In Japan, GoPro captured
57% unit share in Q4 2018, up from 50% in Q4 2017, according to
GfK.
- In China, GoPro grew unit
sell-through by 2% year-over-year in Q4 2018, according to
GfK.
- In Korea, GoPro market share in Q4 2018 was 36% and 53% by
units and dollars, up from 28% and 44% in Q4 2017,
respectively, according to GfK.
- In Thailand, in Q4 2018
GoPro sell-through increased by 169% in units and 154% in dollars,
year-over-year, according to GfK. Market share was 88% and 91%
by units and dollars, respectively, year-over-year.
- Social followers increased by over three million in 2018 to
approximately 38 million, driven primarily by increases on
Instagram and YouTube. GoPro gained one million social followers
in Q4 2018.
- GoPro's Million Dollar Challenge Campaign generated an
all-time high of 25,000 customer content submissions, and the
resulting highlight reel has been viewed more than 25 million times
with more than 3 million engagements across all social
platforms.
- GoPro Plus subscription service reached 199,000 active
paying subscribers as of today, up 8% since September 30, 2018 and up more than 50%
year-over-year.
Results
Summary:
|
|
($ in thousands,
except per share amounts)
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2018
|
|
2017
|
|
%
Change
|
|
2018
|
|
2017
|
|
%
Change
|
Revenue
|
|
$
|
377,378
|
|
|
$
|
334,796
|
|
|
12.7%
|
|
|
$
|
1,148,337
|
|
|
$
|
1,179,741
|
|
|
(2.7)%
|
|
Gross
margin
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
37.7%
|
|
|
23.8%
|
|
|
1390 bps
|
|
|
31.5%
|
|
|
32.6%
|
|
|
(110) bps
|
|
Non-GAAP
|
|
38.4%
|
|
|
24.8%
|
|
|
1360 bps
|
|
|
32.8%
|
|
|
33.3%
|
|
|
(50) bps
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
$
|
32,967
|
|
|
$
|
(58,311)
|
|
|
(156.5)%
|
|
|
$
|
(93,962)
|
|
|
$
|
(163,460)
|
|
|
(42.5)%
|
|
Non-GAAP
|
|
$
|
46,001
|
|
|
$
|
(37,427)
|
|
|
(222.9)%
|
|
|
$
|
(18,876)
|
|
|
$
|
(82,922)
|
|
|
(77.2)%
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
$
|
31,671
|
|
|
$
|
(55,848)
|
|
|
(156.7)%
|
|
|
$
|
(109,034)
|
|
|
$
|
(182,873)
|
|
|
(40.4)%
|
|
Non-GAAP
|
|
$
|
42,356
|
|
|
$
|
(41,319)
|
|
|
(202.5)%
|
|
|
$
|
(31,909)
|
|
|
$
|
(95,867)
|
|
|
(66.7)%
|
|
Diluted net income
(loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
$
|
0.22
|
|
|
$
|
(0.41)
|
|
|
(153.7)%
|
|
|
$
|
(0.78)
|
|
|
$
|
(1.32)
|
|
|
(40.9)%
|
|
Non-GAAP
|
|
$
|
0.30
|
|
|
$
|
(0.30)
|
|
|
(200.0)%
|
|
|
$
|
(0.23)
|
|
|
$
|
(0.69)
|
|
|
(66.7)%
|
|
Adjusted
EBITDA
|
|
$
|
58,807
|
|
|
$
|
(26,544)
|
|
|
(321.5)%
|
|
|
$
|
21,778
|
|
|
$
|
(31,368)
|
|
|
(169.4)%
|
|
Conference Call
GoPro management will host a conference call and live webcast
for analysts and investors today at 2 p.m.
Pacific Time (5 p.m. Eastern
Time) to discuss the Company's financial results.
To listen to the live conference call, please dial toll free
(800) 458-4148 or (323) 794-2597, access code 2816808,
approximately 5 minutes prior to the start of the call. A live
webcast of the conference call will be accessible on the "Events
& Presentations" section of the Company's website at
http://investor.gopro.com. A recording of the webcast will be
available on GoPro's website, http://investor.gopro.com,
approximately two hours after the call and for 90 days
thereafter.
About GoPro, Inc. (NASDAQ: GPRO)
GoPro helps the world capture and share itself in immersive
and exciting ways.
GoPro, HERO and their respective logos are trademarks or
registered trademarks of GoPro, Inc. in the United
States and other countries.
For more information, visit www.gopro.com. GoPro users can
submit their photos, raw clips and video edits to GoPro Awards for
social stoke, GoPro gear and cash prizes. Learn more at
www.gopro.com/awards. Connect with GoPro on Facebook, Instagram,
LinkedIn, Pinterest, Twitter, YouTube, and GoPro's blog The Inside
Line.
GoPro's Use of Social Media
GoPro announces material financial information using the
Company's investor relations website, SEC filings, press releases,
public conference calls and webcasts. GoPro may also use social
media channels to communicate about the Company, its brand and
other matters; these communications could be deemed material
information. Investors and others are encouraged to review posts on
GoPro's pages on Facebook, Instagram, LinkedIn, Pinterest,
Twitter, YouTube, GoPro's investor relations website and The Inside
Line.
Note Regarding Use of Non-GAAP Financial Measures
GoPro reports gross profit, gross margin, operating
expenses, operating income (loss), net income (loss) and diluted
net income (loss) per share in accordance
with U.S. generally accepted accounting principles (GAAP)
and on a non-GAAP basis. Additionally, GoPro reports non-GAAP
adjusted EBITDA. Non-GAAP items exclude, where applicable, the
effects of stock-based compensation, acquisition-related costs,
restructuring costs, non-cash interest expense, gain on sale and
license of intellectual property and the tax impact of these items.
When planning, forecasting and analyzing gross margin, operating
expenses, other income (expense), tax expense, net income and net
income (loss) per share for future periods, GoPro does so primarily
on a non-GAAP basis without preparing a GAAP analysis as that would
require estimates for reconciling items which are inherently
difficult to predict with reasonable accuracy.
Note on Forward-looking Statements
This press release may contain projections or other
forward-looking statements within the meaning Section 27A of the
Private Securities Litigation Reform Act. Words such as
"anticipate," "believe," "estimate," "expect," "intend," "should,"
"will" and variations of these terms or the negative of these
terms and similar expressions are intended to identify these
forward-looking statements. Forward-looking statements in this
presentation may include, but are not limited to, our momentum
heading into 2019, including planned growth and increased
profitability in 2019. These statements involve risks and
uncertainties, and actual events or results may differ materially.
Among the important factors that could cause actual results to
differ materially from those in the forward-looking statements are
the risk that our reduction in operating expenses may impact our
ability to meet our business objectives and achieve our revenue
targets and may not result in the expected improvement in our
profitability; our ability to continue to focus on expense
management; the fact that our future growth depends in part on
further penetrating our addressable market and growing
internationally, and we may not be successful in doing so; any
inability to successfully manage frequent product introductions
(including roadmap for new hardware, software and subscription
products) and transitions, including managing our sales channel and
inventory and accurately forecasting future sales; our reliance on
third party suppliers, some of which are sole source suppliers, to
provide components for our products; our dependence on sales of our
cameras, mounts and accessories for substantially all of our
revenue (and the effects of changes in the sales mix or decrease in
demand for these products) and; the fact that an economic downturn
or economic uncertainty in our key U.S. and international markets
may adversely affect consumer discretionary spending; any changes
to trade policies, tariffs, and import/export regulations; the
effects of transferring US-bound production out of China; the effects of the highly competitive
market in which we operate; the fact that we may not be able to
achieve revenue growth or profitability in the future; risks
related to inventory, purchase commitments and long-lived assets;
difficulty in accurately predicting our future customer demand; the
importance of maintaining the value and reputation of our brand;
and other factors detailed in the Risk Factors section of our
Annual Report on Form 10-K for the year ended December 31, 2017 and Quarterly Report on Form
10-Q for the quarter ended September 30, 2018, and as updated
in future filings with the SEC including the Annual Report on Form
10-K for the year ended December 31,
2018, each of which are on file with the Securities and
Exchange Commission. These forward-looking statements speak only as
of the date hereof or as of the date otherwise stated
herein. GoPro disclaims any obligation to update these
forward-looking statements.
GoPro,
Inc.
|
Preliminary
Condensed Consolidated Statement of Operations
|
(unaudited)
|
|
|
Three months ended
December 31,
|
|
Twelve months
ended December 31,
|
(in thousands,
except per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenue
|
$
|
377,378
|
|
|
$
|
334,796
|
|
|
$
|
1,148,337
|
|
|
$
|
1,179,741
|
|
Cost of
revenue
|
235,261
|
|
|
255,010
|
|
|
786,903
|
|
|
795,211
|
|
Gross
profit
|
142,117
|
|
|
79,786
|
|
|
361,434
|
|
|
384,530
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
36,935
|
|
|
52,504
|
|
|
167,296
|
|
|
229,265
|
|
Sales and
marketing
|
56,799
|
|
|
65,425
|
|
|
222,096
|
|
|
236,581
|
|
General and
administrative
|
15,416
|
|
|
20,168
|
|
|
66,004
|
|
|
82,144
|
|
Total operating
expenses
|
109,150
|
|
|
138,097
|
|
|
455,396
|
|
|
547,990
|
|
Operating income
(loss)
|
32,967
|
|
|
(58,311)
|
|
|
(93,962)
|
|
|
(163,460)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(4,879)
|
|
|
(4,508)
|
|
|
(18,683)
|
|
|
(13,660)
|
|
Other income,
net
|
5,238
|
|
|
28
|
|
|
4,970
|
|
|
733
|
|
Total other
income (expense), net
|
359
|
|
|
(4,480)
|
|
|
(13,713)
|
|
|
(12,927)
|
|
Income (loss) before
income taxes
|
33,326
|
|
|
(62,791)
|
|
|
(107,675)
|
|
|
(176,387)
|
|
Income tax (benefit)
expense
|
1,655
|
|
|
(6,943)
|
|
|
1,359
|
|
|
6,486
|
|
Net income
(loss)
|
$
|
31,671
|
|
|
$
|
(55,848)
|
|
|
$
|
(109,034)
|
|
|
$
|
(182,873)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.22
|
|
|
$
|
(0.41)
|
|
|
$
|
(0.78)
|
|
|
$
|
(1.32)
|
|
Diluted
|
$
|
0.22
|
|
|
$
|
(0.41)
|
|
|
$
|
(0.78)
|
|
|
$
|
(1.32)
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used to compute net income (loss) per share:
|
|
|
|
|
|
|
|
Basic
|
140,882
|
|
|
136,886
|
|
|
139,425
|
|
|
138,056
|
|
Diluted
|
143,241
|
|
|
136,886
|
|
|
139,425
|
|
|
138,056
|
|
GoPro,
Inc.
|
Preliminary
Condensed Consolidated Balance Sheets
|
(unaudited)
|
|
(in
thousands)
|
December 31,
2018
|
|
December 31,
2017
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
152,095
|
|
|
$
|
202,504
|
|
Marketable
securities
|
45,417
|
|
|
44,886
|
|
Accounts receivable,
net
|
129,216
|
|
|
112,935
|
|
Inventory
|
116,458
|
|
|
150,551
|
|
Prepaid expenses and
other current assets
|
30,887
|
|
|
62,811
|
|
Total current
assets
|
474,073
|
|
|
573,687
|
|
Property and
equipment, net
|
46,567
|
|
|
68,587
|
|
Intangible assets,
net and goodwill
|
159,524
|
|
|
170,958
|
|
Other long-term
assets
|
18,195
|
|
|
37,014
|
|
Total
assets
|
$
|
698,359
|
|
|
$
|
850,246
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
148,478
|
|
|
$
|
138,257
|
|
Accrued
liabilities
|
135,892
|
|
|
213,030
|
|
Deferred
revenue
|
15,129
|
|
|
19,244
|
|
Total current
liabilities
|
299,499
|
|
|
370,531
|
|
Long-term
debt
|
138,992
|
|
|
130,048
|
|
Other long-term
liabilities
|
47,756
|
|
|
50,962
|
|
Total
liabilities
|
486,247
|
|
|
551,541
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock and
additional paid-in capital
|
894,755
|
|
|
854,452
|
|
Treasury stock, at
cost
|
(113,613)
|
|
|
(113,613)
|
|
Accumulated
deficit
|
(569,030)
|
|
|
(442,134)
|
|
Total stockholders'
equity
|
212,112
|
|
|
298,705
|
|
Total liabilities and
stockholders' equity
|
$
|
698,359
|
|
|
$
|
850,246
|
|
GoPro,
Inc.
|
Preliminary
Condensed Consolidated Statement of Cash Flows
|
(unaudited)
|
|
|
Three months ended
December 31,
|
|
Twelve months
ended December 31,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Operating
activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
31,671
|
|
|
$
|
(55,848)
|
|
|
$
|
(109,034)
|
|
|
$
|
(182,873)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
7,290
|
|
|
9,218
|
|
|
35,063
|
|
|
41,478
|
|
Stock-based
compensation
|
9,716
|
|
|
15,020
|
|
|
40,887
|
|
|
51,255
|
|
Deferred income
taxes
|
598
|
|
|
(709)
|
|
|
(389)
|
|
|
(2,527)
|
|
Non-cash
restructuring charges
|
494
|
|
|
3,456
|
|
|
6,282
|
|
|
7,315
|
|
Non-cash interest
expense
|
2,124
|
|
|
1,979
|
|
|
8,112
|
|
|
5,345
|
|
Sale and license of
intellectual property
|
(5,000)
|
|
|
—
|
|
|
(5,000)
|
|
|
—
|
|
Other
|
1,997
|
|
|
203
|
|
|
1,696
|
|
|
4,094
|
|
Net changes in
operating assets and liabilities
|
(476)
|
|
|
83,671
|
|
|
(17,600)
|
|
|
39,060
|
|
Net cash provided by
(used in) operating activities
|
48,414
|
|
|
56,990
|
|
|
(39,983)
|
|
|
(36,853)
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment, net
|
(2,800)
|
|
|
(5,748)
|
|
|
(11,004)
|
|
|
(24,061)
|
|
Purchases of
marketable securities
|
(42,835)
|
|
|
(20,400)
|
|
|
(57,731)
|
|
|
(52,318)
|
|
Maturities of
marketable securities
|
2,500
|
|
|
7,499
|
|
|
57,500
|
|
|
21,659
|
|
Sale of marketable
securities
|
—
|
|
|
—
|
|
|
—
|
|
|
11,623
|
|
Proceeds from the
sale and license of intellectual property
|
5,000
|
|
|
—
|
|
|
5,000
|
|
|
—
|
|
Net cash used in
investing activities
|
(38,135)
|
|
|
(18,649)
|
|
|
(6,235)
|
|
|
(43,097)
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Proceeds from
issuance of common stock
|
38
|
|
|
128
|
|
|
5,169
|
|
|
9,751
|
|
Taxes paid related to
net share settlement of equity awards
|
(1,262)
|
|
|
(840)
|
|
|
(6,650)
|
|
|
(12,118)
|
|
Proceeds from
issuance of convertible senior notes
|
—
|
|
|
—
|
|
|
—
|
|
|
175,000
|
|
Prepayment of forward
stock repurchase transaction
|
—
|
|
|
—
|
|
|
—
|
|
|
(78,000)
|
|
Payment of deferred
acquisition-related consideration
|
—
|
|
|
1
|
|
|
(2,450)
|
|
|
(75)
|
|
Payment of credit
facility issuance costs
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(5,964)
|
|
Net cash provided by
(used in) financing activities
|
(1,224)
|
|
|
(712)
|
|
|
(3,931)
|
|
|
88,594
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(206)
|
|
|
259
|
|
|
(260)
|
|
|
1,746
|
|
Net change in cash
and cash equivalents
|
8,849
|
|
|
37,888
|
|
|
(50,409)
|
|
|
10,390
|
|
Cash and cash
equivalents at beginning of period
|
143,246
|
|
|
164,616
|
|
|
202,504
|
|
|
192,114
|
|
Cash and cash
equivalents at end of period
|
$
|
152,095
|
|
|
$
|
202,504
|
|
|
$
|
152,095
|
|
|
$
|
202,504
|
|
GoPro, Inc.
Reconciliation of
Preliminary GAAP to Non-GAAP Financial Measures
To supplement our unaudited selected financial data presented on
a basis consistent with GAAP, we disclose certain non-GAAP
financial measures, including non-GAAP gross profit, gross margin,
operating expenses, operating income (loss), net income (loss),
diluted net income (loss) per share and adjusted EBITDA. We also
provide forecasts of non-GAAP gross margin, non-GAAP operating
expenses, non-GAAP net income (loss) and non-GAAP diluted net
income (loss) per share. We use these non-GAAP financial measures
to help us understand and evaluate our core operating performance
and trends, to prepare and approve our annual budget, and to
develop short-term and long-term operational plans. Our management
uses, and believes that investors benefit from referring to, these
non-GAAP financial measures in assessing our operating results.
These non-GAAP financial measures should not be considered in
isolation from, or as an alternative to, the measures prepared in
accordance with GAAP, and are not based on any comprehensive set of
accounting rules or principles. We believe that these non-GAAP
measures, when read in conjunction with our GAAP financials,
provide useful information to investors by facilitating:
- the comparability of our on-going operating results over the
periods presented;
- the ability to identify trends in our underlying business;
and
- the comparison of our operating results against analyst
financial models and operating results of other public companies
that supplement their GAAP results with non-GAAP financial
measures.
These non-GAAP financial measures have limitations in that they
do not reflect all of the amounts associated with our results of
operations as determined in accordance with GAAP. Some of these
limitations are:
- adjusted EBITDA does not reflect tax payments that reduce cash
available to us;
- adjusted EBITDA excludes depreciation and amortization and,
although these are non-cash charges, the property and equipment
being depreciated and amortized often will have to be replaced in
the future, and adjusted EBITDA does not reflect any cash capital
expenditure requirements for such replacements;
- adjusted EBITDA excludes the amortization of POP display assets
because it is a non-cash charge, and is treated similarly to
depreciation of property and equipment and amortization of acquired
intangible assets;
- adjusted EBITDA and non-GAAP net income (loss) exclude the
impairment of intangible assets because it is a non-cash charge
that is inconsistent in amount and frequency;
- adjusted EBITDA and non-GAAP net income (loss) exclude
restructuring costs which primarily include severance-related
costs, stock-based compensation expenses and facilities
consolidation charges recorded in connection with restructuring
actions announced in the first and fourth quarters of 2016, first
quarter of 2017 and first quarter of 2018. These expenses do not
reflect expected future operating expenses and do not contribute to
a meaningful evaluation of current operating performance or
comparisons to the operating performance in other periods;
- adjusted EBITDA and non-GAAP net income (loss) exclude
stock-based compensation expense related to equity awards granted
primarily to our workforce. We exclude stock-based compensation
expense because we believe that the non-GAAP financial measures
excluding this item provide meaningful supplemental information
regarding operational performance. In particular, we note that
companies calculate stock-based compensation expense for the
variety of award types that they employ using different valuation
methodologies and subjective assumptions. These non-cash charges
are not factored into our internal evaluation of net income (loss)
as we believe their inclusion would hinder our ability to assess
core operational performance;
- non-GAAP net income (loss) excludes acquisition-related costs
including the amortization of acquired intangible assets (primarily
consisting of acquired technology), the impairment of acquired
intangible assets (if applicable), as well as third-party
transaction costs incurred for legal and other professional
services. These costs are not factored into our evaluation of
potential acquisitions, or of our performance after completion of
the acquisitions, because these costs are not related to our core
operating performance or reflective of ongoing operating results in
the period, and the frequency and amount of such costs are
inconsistent and vary significantly based on the timing and
magnitude of our acquisition transactions and the maturities of the
businesses being acquired;
- non-GAAP net income (loss) excludes non-cash interest expense.
In connection with the issuance of the Convertible Senior Notes in
April 2017, we are required to
recognize non-cash interest expense in accordance with the
authoritative accounting guidance for convertible debt that may be
settled in cash;
- non-GAAP net income (loss) excludes a gain on the sale and
license of intellectual property. This gain is not related to our
core operating performance or reflective of ongoing operating
results in the period, and the frequency and amount of such gains
are inconsistent;
- non-GAAP net income (loss) includes income tax
adjustments. Beginning in the first quarter of 2017, we
implemented a cash-based non-GAAP tax expense approach (based upon
expected annual cash payments for income taxes) for evaluating
operating performance as well as for planning and forecasting
purposes. This non-GAAP tax approach eliminates the effects of
period specific items, which can vary in size and frequency and
does not necessarily reflect our long-term operations.
Historically, we computed a non-GAAP tax rate based on non-GAAP
pre-tax income on a quarterly basis, which considered the income
tax effects of the adjustments above; and
- other companies may calculate these non-GAAP financial measures
differently than we do, limiting their usefulness as comparative
measures.
GoPro,
Inc.
|
Reconciliation of
Preliminary GAAP to Non-GAAP Financial Measures
|
(unaudited)
|
|
Reconciliations of
non-GAAP financial measures are set forth below:
|
|
|
Three months ended
December 31,
|
|
Twelve months
ended December 31,
|
(in thousands,
except per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
GAAP net income
(loss)
|
$
|
31,671
|
|
|
$
|
(55,848)
|
|
|
$
|
(109,034)
|
|
|
$
|
(182,873)
|
|
Stock-based
compensation:
|
|
|
|
|
|
|
|
Cost of
revenue
|
548
|
|
|
580
|
|
|
1,954
|
|
|
1,935
|
|
Research and
development
|
4,694
|
|
|
7,924
|
|
|
19,636
|
|
|
24,963
|
|
Sales and
marketing
|
1,970
|
|
|
3,203
|
|
|
9,459
|
|
|
10,498
|
|
General and
administrative
|
2,504
|
|
|
3,313
|
|
|
9,838
|
|
|
13,859
|
|
Total stock-based
compensation
|
9,716
|
|
|
15,020
|
|
|
40,887
|
|
|
51,255
|
|
|
|
|
|
|
|
|
|
Acquisition-related
costs:
|
|
|
|
|
|
|
|
Cost of
revenue
|
2,082
|
|
|
2,360
|
|
|
11,434
|
|
|
5,985
|
|
Research and
development
|
—
|
|
|
—
|
|
|
—
|
|
|
3,028
|
|
General and
administrative
|
19
|
|
|
—
|
|
|
22
|
|
|
(22)
|
|
Total
acquisition-related costs
|
2,101
|
|
|
2,360
|
|
|
11,456
|
|
|
8,991
|
|
|
|
|
|
|
|
|
|
Restructuring
costs:
|
|
|
|
|
|
|
|
Cost of
revenue
|
22
|
|
|
176
|
|
|
1,379
|
|
|
634
|
|
Research and
development
|
762
|
|
|
1,686
|
|
|
12,794
|
|
|
10,092
|
|
Sales and
marketing
|
249
|
|
|
1,087
|
|
|
5,291
|
|
|
7,047
|
|
General and
administrative
|
184
|
|
|
555
|
|
|
3,279
|
|
|
2,519
|
|
Total restructuring
costs
|
1,217
|
|
|
3,504
|
|
|
22,743
|
|
|
20,292
|
|
|
|
|
|
|
|
|
|
Non-cash interest
expense
|
2,124
|
|
|
1,979
|
|
|
8,112
|
|
|
5,345
|
|
Gain on sale and
license of intellectual property
|
(5,000)
|
|
|
—
|
|
|
(5,000)
|
|
|
—
|
|
Income tax
adjustments
|
527
|
|
|
(8,334)
|
|
|
(1,073)
|
|
|
1,123
|
|
Non-GAAP net
income (loss)
|
$
|
42,356
|
|
|
$
|
(41,319)
|
|
|
$
|
(31,909)
|
|
|
$
|
(95,867)
|
|
|
|
|
|
|
|
|
|
GAAP shares for
diluted net income (loss) per share
|
140,882
|
|
|
136,886
|
|
|
139,425
|
|
|
138,056
|
|
Add: dilutive shares
|
2,359
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-GAAP shares
for diluted net income (loss) per share
|
143,241
|
|
|
136,886
|
|
|
139,425
|
|
|
138,056
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
net income (loss) per share
|
$
|
0.30
|
|
|
$
|
(0.30)
|
|
|
$
|
(0.23)
|
|
|
$
|
(0.69)
|
|
|
Three months ended
December 31,
|
|
Twelve months
ended December 31,
|
(dollars in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
GAAP gross
profit
|
$
|
142,117
|
|
|
$
|
79,786
|
|
|
$
|
361,434
|
|
|
$
|
384,530
|
|
Stock-based
compensation
|
548
|
|
|
580
|
|
|
1,954
|
|
|
1,935
|
|
Acquisition-related
costs
|
2,082
|
|
|
2,360
|
|
|
11,434
|
|
|
5,985
|
|
Restructuring
costs
|
22
|
|
|
176
|
|
|
1,379
|
|
|
634
|
|
Non-GAAP gross
profit
|
$
|
144,769
|
|
|
$
|
82,902
|
|
|
$
|
376,201
|
|
|
$
|
393,084
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
as a % of revenue
|
37.7
|
%
|
|
23.8
|
%
|
|
31.5
|
%
|
|
32.6
|
%
|
Stock-based
compensation
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
Acquisition-related
costs
|
0.6
|
|
|
0.7
|
|
|
1.0
|
|
|
0.5
|
|
Restructuring
costs
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
Non-GAAP gross
profit as a % of revenue
|
38.4
|
%
|
|
24.8
|
%
|
|
32.8
|
%
|
|
33.3
|
%
|
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$
|
109,150
|
|
|
$
|
138,097
|
|
|
$
|
455,396
|
|
|
$
|
547,990
|
|
Stock-based
compensation
|
(9,168)
|
|
|
(14,440)
|
|
|
(38,933)
|
|
|
(49,320)
|
|
Acquisition-related
costs
|
(19)
|
|
|
—
|
|
|
(22)
|
|
|
(3,006)
|
|
Restructuring
costs
|
(1,195)
|
|
|
(3,328)
|
|
|
(21,364)
|
|
|
(19,658)
|
|
Non-GAAP operating
expenses
|
$
|
98,768
|
|
|
$
|
120,329
|
|
|
$
|
395,077
|
|
|
$
|
476,006
|
|
|
|
|
|
|
|
|
|
GAAP operating
income (loss)
|
$
|
32,967
|
|
|
$
|
(58,311)
|
|
|
$
|
(93,962)
|
|
|
$
|
(163,460)
|
|
Stock-based
compensation
|
9,716
|
|
|
15,020
|
|
|
40,887
|
|
|
51,255
|
|
Acquisition-related
costs
|
2,101
|
|
|
2,360
|
|
|
11,456
|
|
|
8,991
|
|
Restructuring
costs
|
1,217
|
|
|
3,504
|
|
|
22,743
|
|
|
20,292
|
|
Non-GAAP operating
income (loss)
|
$
|
46,001
|
|
|
$
|
(37,427)
|
|
|
$
|
(18,876)
|
|
|
$
|
(82,922)
|
|
|
Three months ended
December 31,
|
|
Twelve months
ended December 31,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
GAAP net income
(loss)
|
$
|
31,671
|
|
|
$
|
(55,848)
|
|
|
$
|
(109,034)
|
|
|
$
|
(182,873)
|
|
Income tax (benefit)
expense
|
1,655
|
|
|
(6,943)
|
|
|
1,359
|
|
|
6,486
|
|
Interest expense,
net
|
4,470
|
|
|
4,163
|
|
|
17,278
|
|
|
12,804
|
|
Depreciation and
amortization
|
7,290
|
|
|
9,218
|
|
|
35,063
|
|
|
41,478
|
|
POP display
amortization
|
2,788
|
|
|
4,342
|
|
|
13,482
|
|
|
19,190
|
|
Stock-based
compensation
|
9,716
|
|
|
15,020
|
|
|
40,887
|
|
|
51,255
|
|
Restructuring
costs
|
1,217
|
|
|
3,504
|
|
|
22,743
|
|
|
20,292
|
|
Adjusted
EBITDA
|
$
|
58,807
|
|
|
$
|
(26,544)
|
|
|
$
|
21,778
|
|
|
$
|
(31,368)
|
|
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SOURCE GoPro, Inc.