SAN MATEO, Calif., Nov. 1, 2017 /PRNewswire/ -- GoPro, Inc.
(NASDAQ: GPRO) announced financial results for its third quarter
ended September 30, 2017.
"GoPro has turned a corner, restoring growth and profitability
to our business," said founder and CEO Nicholas Woodman. "We are dedicated to
growing as an innovative company, while being a vigilant steward of
shareholder capital."
"During the quarter we generated $47
million in cash and gross margins were 40 percent.
Year-over-year, we grew revenue by 37 percent and dramatically
reduced operating costs without impacting our product
roadmap. We launched our premium-priced HERO6 Black with
global on-shelf availability and strong critical acclaim. We are
now focused on driving consumer demand to reach our goal of
full-year double-digit revenue growth and non-GAAP
profitability."
Recent GoPro Highlights:
- In the third quarter, GoPro achieved strong revenue growth,
gross margins and adjusted EBITDA. Revenue was $330 million, up 37% year-over-year, gross
margins were approximately 40%, and adjusted EBITDA was
$36 million, up $109 million year-over-year.
- GoPro strengthened its balance sheet, generating
$47 million in cash, ending the third
quarter with a cash balance of $197
million.
- GAAP net income for the third quarter was
approximately $15 million, or $0.10 per share -- a sharp improvement over a
GAAP net loss of $104 million in the
third quarter of 2016. Non-GAAP net income for the third quarter
was $21 million, or $0.15 per share.
- Average sales price (ASP) increased by 22% year-over-year
and 3% sequentially. Increased ASP was a primary contributor to
stronger margins in the quarter and driven by the strong
performance of the premium-priced HERO6.
- Quarterly operating expenses reached a 3-year low. GAAP
operating expenses were down 6% sequentially and down 7% on a
non-GAAP basis. GoPro is tracking toward a non-GAAP operating
expense goal of less than $490
million in 2017 (or approximately $570 million of GAAP operating expenses), down
over 30% year-over-year.
- HERO6 Black launched on September
28. Powered by GoPro's custom-designed GP1 processor,
HERO6 achieves an entirely new level of performance including
stunning 4K60 and 1080p240 video and the most advanced video
stabilization ever achieved in a GoPro. HERO6 Black launched
globally with strong sales execution and a 93% channel fill rate at
retail.
- Prior to the HERO6 launch, HERO5 Black was the best-selling
digital image camera in the U.S. for four straight quarters --
holding that chart position since its launch in 2016, according to
The NPD Group's Retail Tracking Service.
- Fusion will begin shipping in November. Fusion is a 5.2K
spherical camera which captures a 360-degree perspective, so users
never miss a shot. With the GoPro App, Fusion users can share
footage as VR content or, using the app's OverCaptureTM
feature, "punch out" a traditional fixed-perspective video or photo
from any angle in the spherical shot. OverCapture is scheduled to
launch in the GoPro App in January.
- GP1 processor maximizes GoPro's capabilities. The new
chip enables twice the video frame rates, improved image quality,
dynamic range, low-light performance and dramatically improved
video stabilization over previous HERO camera generations. GP1
automatically enables vibrant videos and stunning photos without
forcing users to manage complex image settings. GP1 also advances
GoPro's capabilities in computer vision and machine learning,
enabling HERO6 to analyze visual scenes and sensor data for
improved image quality and automated QuikStories.
- GoPro achieved strong revenue growth across all key
regions. Growth in the Americas was up 20%
year-over-year. EMEA was up 26% year-over-year. APAC
was up 153% year-over-year. More than 50% of GoPro's revenue was
generated in markets outside of the U.S. in the third quarter.
- Strong momentum continues in key Asian markets. GoPro is
seeing strong and sustained results in Asia. Sell-thru year-over-year unit growth in
Japan was up over 99% and
China was up 25%, according to
GfK.
- GoPro's drone, Karma, was the #2 selling drone in the
U.S. priced $1,000 and above during
the six months ending September 2017,
according to the NPD Group's Retail Tracking Service.
- The Quik Mobile Video Editing App was installed 18 million
times year-to-date. Third quarter monthly active users was up
30% sequentially and 155% year-over-year.
- GoPro gained more than 900,000 new social media followers in
the third quarter. Instagram followers were up 30%
year-over-year to more than 14 million, with more than a 470,000
increase in international followers.
- GoPro content was viewed more than 550 million times in the
first nine months of 2017, up more than 27% year-over-year. In
the same period, GoPro content on YouTube saw an 85% increase in
median organic viewership per video.
- GoPro added Golden State Warriors President and Chief
Operating Officer Rick Welts to its
Board of Directors.
Results Summary:
|
|
Three Months Ended
September 30,
|
($ in thousands,
except per share amounts)
|
|
2017
|
|
2016
|
|
%
Change
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
329,805
|
|
|
$
|
240,569
|
|
|
37.1
|
%
|
Gross
margin
|
|
|
|
|
|
|
GAAP
|
|
39.6
|
%
|
|
40.3
|
%
|
|
(70) bps
|
Non-GAAP
|
|
40.1
|
%
|
|
40.6
|
%
|
|
(50) bps
|
Operating income
(loss)
|
|
|
|
|
|
|
GAAP
|
|
$
|
8,049
|
|
|
$
|
(115,589)
|
|
|
107.0
|
%
|
Non-GAAP
|
|
$
|
24,042
|
|
|
$
|
(88,550)
|
|
|
127.2
|
%
|
Net income
(loss)
|
|
|
|
|
|
|
GAAP
|
|
$
|
14,661
|
|
|
$
|
(104,068)
|
|
|
114.1
|
%
|
Non-GAAP
|
|
$
|
21,149
|
|
|
$
|
(84,279)
|
|
|
125.1
|
%
|
Diluted net income
(loss) per share
|
|
|
|
|
|
|
GAAP
|
|
$
|
0.10
|
|
|
$
|
(0.74)
|
|
|
113.5
|
%
|
Non-GAAP
|
|
$
|
0.15
|
|
|
$
|
(0.60)
|
|
|
125.0
|
%
|
Adjusted
EBITDA
|
|
$
|
35,725
|
|
|
$
|
(73,622)
|
|
|
148.5
|
%
|
Business Outlook
GoPro is providing the following guidance:
- Fourth Quarter 2017
-
- Revenue of $470 million +/-
$10 million
- GAAP and Non-GAAP gross margin of 41.5% +/- 50 basis
points
- GAAP operating expenses of $149
million +/- $1 million
- Non-GAAP operating expenses of $130
million +/- $1 million
- GAAP EPS to be between $0.25 and $0.35
- Non-GAAP EPS to be between $0.37
and $0.47
- Full Year 2017
-
- Revenue of $1.315 billion +/-
$10 million
- GAAP operating expenses below $570
million
- Non-GAAP operating expenses below $490
million
- GAAP EPS to be between $(0.65) and $(0.55)
- Non-GAAP EPS to be between $(0.02) to $0.08
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
(888) 503-8169 or (719) 325-4908, access code 1870427,
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. The webcast will be recorded and the
recording 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 makes it easy for people to celebrate and share
experiences. We believe life is more meaningful when shared.
We build cameras, software and accessories that help the world
share itself in immersive and exciting ways.
GoPro, HERO, Karma, Quik, QuikStories and their respective logos
are trademarks or registered trademarks of GoPro,
Inc. in the United States and other countries. All
other trademarks are the property of their respective owners. For
more information, visit www.gopro.com or connect
with GoPro on Facebook, Instagram,
LinkedIn, Pinterest, Twitter, YouTube,
and GoPro's The Inside Line.
For more information, visit www.gopro.com or connect with
GoPro on Facebook, Instagram, LinkedIn, Pinterest, Twitter,
YouTube, and GoPro's 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 and the tax impact
of these items. A reconciliation of preliminary GAAP financial
measures to non-GAAP financial measures, as well as a description
of items excluded from the calculation of non-GAAP financial
measures, is presented in the financial statement portion of this
release. GoPro also provides future estimated ranges of
revenue, gross margin, operating expenses and earnings per share on
a GAAP and non-GAAP basis.
Note on Forward-looking Statements
This press release may contain projections or other
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act. Forward-looking statements in
this press release include, but are not limited to, expectations
regarding our business outlook for the fourth quarter of 2017 and
calendar year 2017. 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; 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 our 2017 roadmap for new
hardware and software products including the new Fusion camera and
major new software features) 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; the effect of a decrease in the
sales or change in sales mix of these products; the effect of a
decrease in sales during the holiday season; the fact that an
economic downturn or economic uncertainty in our key U.S. and
international markets may adversely affect consumer discretionary
spending and demand for our products; any inability to anticipate
consumer preferences and successfully develop and market desirable
products; the risks associated with the entrance into the consumer
drone market and the re-launch of our drone in February 2017; 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; 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, 2016, which is on file
with the Securities and Exchange Commission and as supplemented by
Item 1A Risk Factors in our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2017.
Additional information will also be set forth in our Quarterly
Report on Form 10-Q for the quarter ended September 30, 2017. 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
|
|
Nine months
ended
|
(in thousands,
except per share data)
|
September 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
329,805
|
|
|
$
|
240,569
|
|
|
$
|
844,945
|
|
|
$
|
644,860
|
|
Cost of
revenue
|
199,259
|
|
|
143,500
|
|
|
540,201
|
|
|
395,075
|
|
Gross
profit
|
130,546
|
|
|
97,069
|
|
|
304,744
|
|
|
249,785
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
55,098
|
|
|
96,146
|
|
|
176,761
|
|
|
266,174
|
|
Sales and
marketing
|
46,622
|
|
|
91,567
|
|
|
171,156
|
|
|
255,904
|
|
General and
administrative
|
20,777
|
|
|
24,945
|
|
|
61,976
|
|
|
74,108
|
|
Total
operating expenses
|
122,497
|
|
|
212,658
|
|
|
409,893
|
|
|
596,186
|
|
Operating income
(loss)
|
8,049
|
|
|
(115,589)
|
|
|
(105,149)
|
|
|
(346,401)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(4,554)
|
|
|
(1,156)
|
|
|
(9,152)
|
|
|
(1,815)
|
|
Other income,
net
|
322
|
|
|
348
|
|
|
705
|
|
|
1,360
|
|
Total
other income (expense), net
|
(4,232)
|
|
|
(808)
|
|
|
(8,447)
|
|
|
(455)
|
|
Income (loss) before
income taxes
|
3,817
|
|
|
(116,397)
|
|
|
(113,596)
|
|
|
(346,856)
|
|
Income tax expense
(benefit)
|
(10,844)
|
|
|
(12,329)
|
|
|
13,429
|
|
|
(43,562)
|
|
Net income
(loss)
|
$
|
14,661
|
|
|
$
|
(104,068)
|
|
|
$
|
(127,025)
|
|
|
$
|
(303,294)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.11
|
|
|
$
|
(0.74)
|
|
|
$
|
(0.92)
|
|
|
$
|
(2.18)
|
|
Diluted
|
$
|
0.10
|
|
|
$
|
(0.74)
|
|
|
$
|
(0.92)
|
|
|
$
|
(2.18)
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used to compute net income (loss) per share:
|
|
|
|
|
|
|
|
Basic
|
136,236
|
|
|
140,124
|
|
|
138,450
|
|
|
138,875
|
|
Diluted
|
140,288
|
|
|
140,124
|
|
|
138,450
|
|
|
138,875
|
|
GoPro,
Inc.
Preliminary
Condensed Consolidated Balance Sheets
(unaudited)
|
|
(in
thousands)
|
September 30,
2017
|
|
December 31,
2016
|
|
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
164,616
|
|
|
$
|
192,114
|
|
Marketable
securities
|
31,946
|
|
|
25,839
|
|
Accounts receivable,
net
|
100,026
|
|
|
164,553
|
|
Inventory
|
177,190
|
|
|
167,192
|
|
Prepaid expenses and
other current assets
|
36,471
|
|
|
38,115
|
|
Total
current assets
|
510,249
|
|
|
587,813
|
|
Property and
equipment, net
|
74,196
|
|
|
76,509
|
|
Intangible assets,
net and goodwill
|
173,319
|
|
|
179,989
|
|
Other long-term
assets
|
67,665
|
|
|
78,329
|
|
Total
assets
|
$
|
825,429
|
|
|
$
|
922,640
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
143,054
|
|
|
$
|
205,028
|
|
Accrued
liabilities
|
149,395
|
|
|
211,323
|
|
Deferred
revenue
|
16,301
|
|
|
14,388
|
|
Total
current liabilities
|
308,750
|
|
|
430,739
|
|
Long-term
debt
|
127,861
|
|
|
—
|
|
Other long-term
liabilities
|
48,548
|
|
|
44,956
|
|
Total
liabilities
|
485,159
|
|
|
475,695
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock and
additional paid-in capital
|
840,169
|
|
|
757,226
|
|
Treasury stock, at
cost
|
(113,613)
|
|
|
(35,613)
|
|
Accumulated
deficit
|
(386,286)
|
|
|
(274,668)
|
|
Total
stockholders' equity
|
340,270
|
|
|
446,945
|
|
Total
liabilities and stockholders' equity
|
$
|
825,429
|
|
|
$
|
922,640
|
|
GoPro,
Inc.
Preliminary
Condensed Consolidated Statement of Cash Flows
(unaudited)
|
|
|
Three months
ended
|
|
Nine months
ended
|
(in
thousands)
|
September 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
Operating
activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
14,661
|
|
|
$
|
(104,068)
|
|
|
$
|
(127,025)
|
|
|
$
|
(303,294)
|
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
9,100
|
|
|
12,736
|
|
|
32,260
|
|
|
30,540
|
|
Stock-based
compensation
|
11,875
|
|
|
18,466
|
|
|
36,235
|
|
|
51,601
|
|
Excess tax benefit from
stock-based compensation
|
—
|
|
|
(1,457)
|
|
|
—
|
|
|
(2,374)
|
|
Deferred income
taxes
|
76
|
|
|
(7,462)
|
|
|
(1,818)
|
|
|
(20,956)
|
|
Non-cash restructuring
charges
|
1,059
|
|
|
—
|
|
|
3,859
|
|
|
—
|
|
Impairment of
intangible assets
|
—
|
|
|
6,000
|
|
|
—
|
|
|
6,000
|
|
Non-cash interest
expense
|
1,836
|
|
|
—
|
|
|
3,366
|
|
|
—
|
|
Other
|
128
|
|
|
3,592
|
|
|
3,891
|
|
|
4,754
|
|
Net changes in
operating assets and liabilities
|
16,788
|
|
|
30,469
|
|
|
(44,611)
|
|
|
113,280
|
|
Net cash
provided by (used in) operating activities
|
55,523
|
|
|
(41,724)
|
|
|
(93,843)
|
|
|
(120,449)
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment, net
|
(8,201)
|
|
|
(14,324)
|
|
|
(18,313)
|
|
|
(26,516)
|
|
Purchases of
marketable securities
|
(31,918)
|
|
|
—
|
|
|
(31,918)
|
|
|
—
|
|
Maturities of
marketable securities
|
—
|
|
|
21,922
|
|
|
14,160
|
|
|
93,224
|
|
Sale of marketable
securities
|
—
|
|
|
—
|
|
|
11,623
|
|
|
6,791
|
|
Acquisitions, net of
cash acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
(104,353)
|
|
Net cash
provided by (used in) investing activities
|
(40,119)
|
|
|
7,598
|
|
|
(24,448)
|
|
|
(30,854)
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Proceeds from
issuance of common stock
|
2,994
|
|
|
937
|
|
|
9,623
|
|
|
6,202
|
|
Taxes paid related to
net share settlement of equity awards
|
(3,068)
|
|
|
|
|
(11,278)
|
|
|
(860)
|
|
Proceeds from
issuance of convertible senior notes
|
—
|
|
|
—
|
|
|
175,000
|
|
|
—
|
|
Prepayment of forward
stock repurchase transaction
|
—
|
|
|
—
|
|
|
(78,000)
|
|
|
—
|
|
Excess tax benefit
from stock-based compensation
|
—
|
|
|
1,457
|
|
|
—
|
|
|
2,374
|
|
Payment of deferred
acquisition-related consideration
|
(1)
|
|
|
—
|
|
|
(76)
|
|
|
(950)
|
|
Payment of debt
issuance costs
|
(713)
|
|
|
(66)
|
|
|
(5,963)
|
|
|
(3,287)
|
|
Net cash
provided by (used in) financing activities
|
(788)
|
|
|
2,328
|
|
|
89,306
|
|
|
3,479
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
245
|
|
|
(137)
|
|
|
1,487
|
|
|
(271)
|
|
Net increase
(decrease) in cash and cash equivalents
|
14,861
|
|
|
(31,935)
|
|
|
(27,498)
|
|
|
(148,095)
|
|
Cash and cash
equivalents at beginning of period
|
149,755
|
|
|
163,512
|
|
|
192,114
|
|
|
279,672
|
|
Cash and cash
equivalents at end of period
|
$
|
164,616
|
|
|
$
|
131,577
|
|
|
$
|
164,616
|
|
|
$
|
131,577
|
|
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),
earnings (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 earnings (loss) per
share. These non-GAAP measures are not in accordance with, nor
serve as an alternative for GAAP. We believe that these
non-GAAP measures have limitations in that they do not reflect all
of the amounts associated with our GAAP results of operations.
These non-GAAP measures should only be viewed in conjunction with
corresponding GAAP measures.
In calculating non-GAAP financial measures, we exclude certain
items to facilitate a review of the comparability of our core
operating performance on a period-to-period basis. The excluded
items represent stock-based compensation and other charges that we
do not consider to be directly related to core operating
performance. We use non-GAAP measures to evaluate the core
operating performance of our business, for comparison with
forecasts and strategic plans and for calculating return on
investment. In addition, management's incentive compensation is
determined using non-GAAP measures. Since we find these measures to
be useful, we believe that investors benefit from seeing results
reviewed by management in addition to seeing GAAP results. 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.
The following are explanations of each type of adjustment that
we incorporate into non-GAAP financial measures:
- Stock-based compensation expense relates 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. We believe that excluding this
expense provides greater visibility to the underlying performance
of our business operations, facilitates comparison of our results
with other periods, and may also facilitate comparison with the
results of other companies in our industry.
- Acquisition-related costs include 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.
- Restructuring costs 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 and the
first quarter of 2017. We believe that excluding these costs
provides greater visibility to the underlying performance of our
business operations, facilitates comparison of our results with
other periods, and may also facilitate comparison with the results
of other companies in our industry.
- Non-cash interest expense. In connection with 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. We exclude this
incremental non-cash interest expense for purposes of calculating
non-GAAP net income (loss). We believe that excluding non-cash
interest expense provides greater visibility to the underlying
performance of our business operations, facilitates comparison of
our results with other periods, and may also facilitate comparison
with the results of other companies in our industry.
- Income tax adjustments. Beginning in the first quarter
of 2017, we have 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.
- Adjusted EBITDA excludes the amortization of
point-of-purchase (POP) display assets because it is a non-cash
charge, and is similar to the depreciation of property and
equipment and amortization of acquired intangible assets.
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
|
|
Nine months
ended
|
(in thousands,
except per share data)
|
September 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
14,661
|
|
|
$
|
(104,068)
|
|
|
$
|
(127,025)
|
|
|
$
|
(303,294)
|
|
Stock-based
compensation:
|
|
|
|
|
|
|
|
Cost of
revenue
|
445
|
|
|
426
|
|
|
1,355
|
|
|
1,195
|
|
Research and
development
|
5,967
|
|
|
8,039
|
|
|
17,039
|
|
|
21,135
|
|
Sales and
marketing
|
2,609
|
|
|
3,816
|
|
|
7,295
|
|
|
10,699
|
|
General and
administrative
|
2,854
|
|
|
6,185
|
|
|
10,546
|
|
|
18,572
|
|
Total
stock-based compensation
|
11,875
|
|
|
18,466
|
|
|
36,235
|
|
|
51,601
|
|
|
|
|
|
|
|
|
|
Acquisition-related
costs:
|
|
|
|
|
|
|
|
Cost of
revenue
|
1,195
|
|
|
222
|
|
|
3,625
|
|
|
666
|
|
Research and
development
|
946
|
|
|
8,355
|
|
|
3,028
|
|
|
11,858
|
|
Sales and
marketing
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
General and
administrative
|
—
|
|
|
(4)
|
|
|
(22)
|
|
|
1,100
|
|
Total
acquisition-related costs
|
2,141
|
|
|
8,573
|
|
|
6,631
|
|
|
13,646
|
|
|
|
|
|
|
|
|
|
Restructuring
costs:
|
|
|
|
|
|
|
|
Cost of
revenue
|
40
|
|
|
—
|
|
|
458
|
|
|
364
|
|
Research and
development
|
1,025
|
|
|
—
|
|
|
8,406
|
|
|
2,655
|
|
Sales and
marketing
|
357
|
|
|
—
|
|
|
5,960
|
|
|
2,678
|
|
General and
administrative
|
555
|
|
|
—
|
|
|
1,964
|
|
|
811
|
|
Total
restructuring costs
|
1,977
|
|
|
—
|
|
|
16,788
|
|
|
6,508
|
|
|
|
|
|
|
|
|
|
Non-cash interest
expense
|
1,836
|
|
|
—
|
|
|
3,366
|
|
|
—
|
|
Income tax
adjustments
|
(11,341)
|
|
|
(7,250)
|
|
|
9,457
|
|
|
(12,075)
|
|
Non-GAAP net
income (loss)
|
$
|
21,149
|
|
|
$
|
(84,279)
|
|
|
$
|
(54,548)
|
|
|
$
|
(243,614)
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
net income (loss) per share
|
$
|
0.15
|
|
|
$
|
(0.60)
|
|
|
$
|
(0.39)
|
|
|
$
|
(1.75)
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
(dollars in
thousands)
|
September 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
GAAP gross
profit
|
$
|
130,546
|
|
|
$
|
97,069
|
|
|
$
|
304,744
|
|
|
$
|
249,785
|
|
Stock-based
compensation
|
445
|
|
|
426
|
|
|
1,355
|
|
|
1,195
|
|
Acquisition-related
costs
|
1,195
|
|
|
222
|
|
|
3,625
|
|
|
666
|
|
Restructuring
costs
|
40
|
|
|
—
|
|
|
458
|
|
|
364
|
|
Non-GAAP gross
profit
|
$
|
132,226
|
|
|
$
|
97,717
|
|
|
$
|
310,182
|
|
|
$
|
252,010
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
as a % of revenue
|
39.6
|
%
|
|
40.3
|
%
|
|
36.1
|
%
|
|
38.7
|
%
|
Stock-based
compensation
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
Acquisition-related
costs
|
0.4
|
|
|
0.1
|
|
|
0.4
|
|
|
0.1
|
|
Restructuring
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
Non-GAAP gross
profit as a % of revenue
|
40.1
|
%
|
|
40.6
|
%
|
|
36.7
|
%
|
|
39.1
|
%
|
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$
|
122,497
|
|
|
$
|
212,658
|
|
|
$
|
409,893
|
|
|
$
|
596,186
|
|
Stock-based
compensation
|
(11,430)
|
|
|
(18,040)
|
|
|
(34,880)
|
|
|
(50,406)
|
|
Acquisition-related
costs
|
(946)
|
|
|
(8,351)
|
|
|
(3,006)
|
|
|
(12,980)
|
|
Restructuring
costs
|
(1,937)
|
|
|
—
|
|
|
(16,330)
|
|
|
(6,144)
|
|
Non-GAAP operating
expenses
|
$
|
108,184
|
|
|
$
|
186,267
|
|
|
$
|
355,677
|
|
|
$
|
526,656
|
|
|
|
|
|
|
|
|
|
GAAP operating
income (loss)
|
$
|
8,049
|
|
|
$
|
(115,589)
|
|
|
$
|
(105,149)
|
|
|
$
|
(346,401)
|
|
Stock-based
compensation
|
11,875
|
|
|
18,466
|
|
|
36,235
|
|
|
51,601
|
|
Acquisition-related
costs
|
2,141
|
|
|
8,573
|
|
|
6,631
|
|
|
13,646
|
|
Restructuring
costs
|
1,977
|
|
|
—
|
|
|
16,788
|
|
|
6,508
|
|
Non-GAAP operating
income (loss)
|
$
|
24,042
|
|
|
$
|
(88,550)
|
|
|
$
|
(45,495)
|
|
|
$
|
(274,646)
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
(in
thousands)
|
September 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
GAAP net income
(loss)
|
$
|
14,661
|
|
|
$
|
(104,068)
|
|
|
$
|
(127,025)
|
|
|
$
|
(303,294)
|
|
Income tax expense
(benefit)
|
(10,844)
|
|
|
(12,329)
|
|
|
13,429
|
|
|
(43,562)
|
|
Interest expense
(income), net
|
4,228
|
|
|
596
|
|
|
8,641
|
|
|
379
|
|
Depreciation and
amortization
|
9,100
|
|
|
12,734
|
|
|
32,260
|
|
|
30,539
|
|
POP display
amortization
|
4,728
|
|
|
4,979
|
|
|
14,848
|
|
|
14,679
|
|
Stock-based
compensation
|
11,875
|
|
|
18,466
|
|
|
36,235
|
|
|
51,601
|
|
Impairment of
intangible assets
|
—
|
|
|
6,000
|
|
|
—
|
|
|
6,000
|
|
Restructuring
costs
|
1,977
|
|
|
—
|
|
|
16,788
|
|
|
6,508
|
|
Adjusted
EBITDA
|
$
|
35,725
|
|
|
$
|
(73,622)
|
|
|
$
|
(4,824)
|
|
|
$
|
(237,150)
|
|
Reconciliations of non-GAAP financial measures for business
outlook are set forth below:
(in
thousands)
|
Q4
2017
|
|
Full year
2017
|
GAAP operating
expenses
|
$ 148,000 - $
150,000
|
|
$
|
570,000
|
Estimated adjustments
for:
|
|
|
|
Stock-based
compensation
|
15,000
|
|
55,000
|
Acquisition-related
costs
|
3,000
|
|
10,000
|
Restructuring
costs
|
1,000
|
|
15,000
|
Non-GAAP operating
expenses
|
$129,000 -
$131,000
|
|
$
|
490,000
|
|
|
Q4
2017
|
|
Full year
2017
|
GAAP net income
(loss) per share
|
$ 0.25 - $
0.35
|
|
$ (0.65) - $
(0.55)
|
Estimated adjustments
for:
|
|
|
|
Stock-based
compensation
|
0.11 -
0.12
|
|
0.37 -
0.38
|
Acquisition-related
costs
|
0.02 -
0.03
|
|
0.06 -
0.07
|
Restructuring
costs
|
0.00 -
0.01
|
|
0.11 -
0.12
|
Non-cash interest
expense
|
0.01
|
|
0.04
|
Income tax
adjustments
|
(0.04)
|
|
0.03
|
Non-GAAP net
income (loss) per share
|
$ 0.37 - $
0.47
|
|
$ (0.02) - $
0.08
|
View original
content:http://www.prnewswire.com/news-releases/gopro-announces-third-quarter-2017-results-300547776.html
SOURCE GoPro, Inc.