SAN MATEO, Calif., May 3, 2018 /PRNewswire/ -- GoPro,
Inc. (NASDAQ: GPRO) announced financial results for its first
quarter ended March 31, 2018.
"Our first quarter was driven by strong sell-through of HERO5
Black and HERO6 Black, along with the launch of our new
$199 entry-level HERO. Initial demand
for HERO is promising and we expect it to improve as large retail
partners like Target and Walmart begin selling the product in the
second quarter," said Nicholas
Woodman, GoPro CEO and founder. "Our first quarter
performance makes it clear that there is significant demand for
GoPro, at the right price. We began to step up marketing programs
in March which, coupled with overall expense controls, solid
channel management and second half new product launches, gives us
confidence for a successful 2018 for GoPro."
Recent GoPro Highlights
- Revenue was $202 million, down
7% YoY, while unit growth was up 3% YoY. GoPro reduced GAAP
operating expenses by $37 million, or
24%, year-over-year. GoPro reduced non-GAAP operating expenses by
$37 million, or 28% year-over-year.
In 2018, GoPro is targeting non-GAAP operating expenses below
$400 million — a cumulative reduction
of more than $300 million since
2016.
- In the U.S., GoPro held 86% and 95% of the action camera
category by unit and dollar volume, respectively, in Q1 2018
according to NPD.
- GoPro is the #1 selling camera in the overall digital
imaging category for the 17th straight quarter in
North America.
- In Europe, GoPro held 44%
and 72% of the action camera category by unit and dollar volume,
respectively, in Q1 2018, according to GfK.
- In APAC, GoPro market share of the action camera category
increased in unit and dollar volume from 45% to 52% and from 63% to
65% quarter-over-quarter, respectively, according to GfK.
- In Korea and Japan, unit
sell-through grew by 46% and 22% respectively
quarter-over-quarter, according to GfK.
- Fusion captured 41% of the spherical camera market on a
dollar basis, according to NPD. Fusion also won gold at the
2018 Edison Awards.
- $199 entry-level HERO launched
on March 29. Distribution will
expand to Target, Walmart and others in Q2.
- 'Plus' subscription service has 147,000 active paying
subscribers, up 17% since December
31st.
- Eve Saltman
was appointed General Counsel and Vice President,
Corporate/Business Development.
- GoPro content was viewed 148 million times on social media,
up more than 8% year-over-year. GoPro's YouTube channel
increased 4% in organic viewership year-over-year with 76
million views in Q1.
- On Instagram, GoPro added 245K new followers in
Q1, reaching a total of 15 million. GoPro gained more
than half a million new social media followers in Q1, growing its
total following to 36 million across all platforms.
- Shorty Awards. GoPro won "Best Overall Brand on
Instagram" at the coveted 2018 Shorty Awards.
- Instagram Stories Integration announced on May 1 at Facebook's F8 conference. GoPro and
Instagram partnered to enable GoPro users to share their content
directly from the GoPro App to Instagram Stories.
Results
Summary:
|
|
|
|
|
|
Three months ended
March 31,
|
($ in thousands,
except per share amounts)
|
|
2018
|
|
2017
|
|
% Change
|
Revenue
|
|
$
|
202,346
|
|
|
$
|
218,614
|
|
|
7.4
|
%
|
Gross
margin
|
|
|
|
|
|
|
GAAP
|
|
22.2
|
%
|
|
31.4
|
%
|
|
920 bps
|
|
Non-GAAP
|
|
24.3
|
%
|
|
32.3
|
%
|
|
800 bps
|
|
Operating
loss
|
|
|
|
|
|
|
GAAP
|
|
$
|
(74,739)
|
|
|
$
|
(88,215)
|
|
|
15.3
|
%
|
Non-GAAP
|
|
$
|
(44,520)
|
|
|
$
|
(60,287)
|
|
|
26.2
|
%
|
Net
loss
|
|
|
|
|
|
|
GAAP
|
|
$
|
(76,347)
|
|
|
$
|
(111,150)
|
|
|
31.3
|
%
|
Non-GAAP
|
|
$
|
(47,364)
|
|
|
$
|
(62,783)
|
|
|
24.6
|
%
|
Diluted net loss
per share
|
|
|
|
|
|
|
GAAP
|
|
$
|
(0.55)
|
|
|
$
|
(0.78)
|
|
|
29.5
|
%
|
Non-GAAP
|
|
$
|
(0.34)
|
|
|
$
|
(0.44)
|
|
|
22.7
|
%
|
Adjusted
EBITDA
|
|
$
|
(34,537)
|
|
|
$
|
(45,669)
|
|
|
24.4
|
%
|
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
(877) 741-4253 or (719) 457-2604, access code 2677779,
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 celebrate and 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.
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 and the tax impact
of these items. Reconciliations of 2018 target GAAP to non-GAAP
gross margin, operating expenses and tax expense have not been
provided because doing so would require an unreasonable effort due
to the unavailability of information needed to calculate
reconciling items and due to the variability, complexity and
limited visibility of the adjusting items that would be excluded
from the non-GAAP financial measures in future period. When
planning, forecasting and analyzing gross margin, operating
expenses and tax expense 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 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 2018. 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 2018 roadmap for new
hardware and software products and major new software features) and
transitions; any inability to manage 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 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, 2017, which is on file
with the Securities and Exchange Commission and as supplemented by
Item 1A. 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
March 31,
|
(in thousands,
except per share data)
|
2018
|
|
2017
|
Revenue
|
$
|
202,346
|
|
$
|
218,614
|
Cost of
revenue
|
157,430
|
|
150,048
|
Gross
profit
|
44,916
|
|
68,566
|
|
|
|
|
Operating
expenses:
|
|
|
|
Research and
development
|
50,979
|
|
66,166
|
Sales and
marketing
|
49,170
|
|
67,856
|
General and
administrative
|
19,506
|
|
22,759
|
Total operating
expenses
|
119,655
|
|
156,781
|
Operating
loss
|
(74,739)
|
|
(88,215)
|
Other income
(expense):
|
|
|
|
Interest
expense
|
(4,567)
|
|
(814)
|
Other income,
net
|
177
|
|
161
|
Total other
expense, net
|
(4,390)
|
|
(653)
|
Loss before income
taxes
|
(79,129)
|
|
(88,868)
|
Income tax (benefit)
expense
|
(2,782)
|
|
22,282
|
Net loss
|
$
|
(76,347)
|
|
$
|
(111,150)
|
|
|
|
|
Net loss per
share:
|
|
|
|
Basic
|
$
|
(0.55)
|
|
$
|
(0.78)
|
Diluted
|
$
|
(0.55)
|
|
$
|
(0.78)
|
|
|
|
|
Weighted-average
shares used to compute net loss per share:
|
|
|
|
Basic
|
137,857
|
|
142,899
|
Diluted
|
137,857
|
|
142,899
|
GoPro,
Inc. Preliminary Condensed Consolidated Balance
Sheets (unaudited)
|
|
(in
thousands)
|
March 31,
2018
|
|
December 31,
2017
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
104,987
|
|
$
|
202,504
|
Marketable
securities
|
39,846
|
|
44,886
|
Accounts receivable,
net
|
81,431
|
|
112,935
|
Inventory
|
132,619
|
|
150,551
|
Prepaid expenses and
other current assets
|
32,703
|
|
62,811
|
Total current
assets
|
391,586
|
|
573,687
|
Property and
equipment, net
|
62,791
|
|
68,587
|
Intangible assets,
net and goodwill
|
168,303
|
|
170,958
|
Other long-term
assets
|
26,194
|
|
37,014
|
Total
assets
|
$
|
648,874
|
|
$
|
850,246
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
87,534
|
|
$
|
138,257
|
Accrued
liabilities
|
146,945
|
|
213,030
|
Deferred
revenue
|
15,235
|
|
19,244
|
Total current
liabilities
|
249,714
|
|
370,531
|
Long-term
debt
|
132,189
|
|
130,048
|
Other long-term
liabilities
|
50,894
|
|
50,962
|
Total
liabilities
|
432,797
|
|
551,541
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock and
additional paid-in capital
|
866,033
|
|
854,452
|
Treasury stock, at
cost
|
(113,613)
|
|
(113,613)
|
Accumulated
deficit
|
(536,343)
|
|
(442,134)
|
Total
stockholders' equity
|
216,077
|
|
298,705
|
Total
liabilities and stockholders' equity
|
$
|
648,874
|
|
$
|
850,246
|
GoPro,
Inc. Preliminary Condensed Consolidated Statement of Cash
Flows (unaudited)
|
|
|
Three months ended
March 31,
|
(in
thousands)
|
2018
|
|
2017
|
Operating
activities:
|
|
|
|
Net loss
|
$
|
(76,347)
|
|
$
|
(111,150)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
8,907
|
|
11,693
|
Stock-based
compensation
|
10,823
|
|
13,125
|
Deferred income
taxes
|
(593)
|
|
(2,050)
|
Non-cash restructuring
charges
|
2,933
|
|
966
|
Non-cash interest
expense
|
1,934
|
|
—
|
Other
|
272
|
|
1,630
|
Net changes in
operating assets and liabilities
|
(45,041)
|
|
(52,152)
|
Net cash used in
operating activities
|
(97,112)
|
|
(137,938)
|
|
|
|
|
Investing
activities:
|
|
|
|
Purchases of property
and equipment, net
|
(6,782)
|
|
(5,166)
|
Purchases of
marketable securities
|
(14,896)
|
|
—
|
Maturities of
marketable securities
|
20,000
|
|
14,160
|
Sale of marketable
securities
|
—
|
|
11,623
|
Net cash provided by
(used in) investing activities
|
(1,678)
|
|
20,617
|
|
|
|
|
Financing
activities:
|
|
|
|
Proceeds from
issuance of common stock
|
3,210
|
|
6,038
|
Taxes paid related to
net share settlement of equity awards
|
(2,402)
|
|
(6,283)
|
Payment of deferred
acquisition-related consideration
|
—
|
|
(75)
|
Net cash provided by
(used in) financing activities
|
808
|
|
(320)
|
Effect of exchange
rate changes on cash and cash equivalents
|
465
|
|
404
|
Net decrease in cash
and cash equivalents
|
(97,517)
|
|
(117,237)
|
Cash and cash
equivalents at beginning of period
|
202,504
|
|
192,114
|
Cash and cash
equivalents at end of period
|
$
|
104,987
|
|
$
|
74,877
|
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 were tied
to unique circumstances related to organizational restructuring, 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) 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
March 31,
|
(in thousands,
except per share data)
|
2018
|
|
2017
|
GAAP net
loss
|
$
|
(76,347)
|
|
$
|
(111,150)
|
Stock-based
compensation:
|
|
|
|
Cost of
revenue
|
382
|
|
495
|
Research and
development
|
5,005
|
|
5,682
|
Sales and
marketing
|
2,747
|
|
2,691
|
General and
administrative
|
2,689
|
|
4,257
|
Total
stock-based compensation
|
10,823
|
|
13,125
|
|
|
|
|
Acquisition-related
costs:
|
|
|
|
Cost of
revenue
|
2,655
|
|
1,235
|
Research and
development
|
—
|
|
1,136
|
General and
administrative
|
3
|
|
(23)
|
Total
acquisition-related costs
|
2,658
|
|
2,348
|
|
|
|
|
Restructuring
costs:
|
|
|
|
Cost of
revenue
|
1,239
|
|
393
|
Research and
development
|
9,599
|
|
5,679
|
Sales and
marketing
|
3,618
|
|
5,242
|
General and
administrative
|
2,282
|
|
1,141
|
Total
restructuring costs
|
16,738
|
|
12,455
|
|
|
|
|
Non-cash interest
expense
|
1,934
|
|
—
|
Income tax
adjustments
|
(3,170)
|
|
20,439
|
Non-GAAP net
loss
|
$
|
(47,364)
|
|
$
|
(62,783)
|
|
|
|
|
GAAP shares for
diluted net loss per share
|
137,857
|
|
142,899
|
Add: dilutive shares
|
—
|
|
—
|
Non-GAAP shares
for diluted net loss per share
|
137,857
|
|
142,899
|
|
|
|
|
Non-GAAP diluted
net loss per share
|
$
|
(0.34)
|
|
$
|
(0.44)
|
|
Three months ended
March 31,
|
(dollars in
thousands)
|
2018
|
|
2017
|
GAAP gross
profit
|
$
|
44,916
|
|
|
$
|
68,566
|
|
Stock-based
compensation
|
382
|
|
|
495
|
|
Acquisition-related
costs
|
2,655
|
|
|
1,235
|
|
Restructuring
costs
|
1,239
|
|
|
393
|
|
Non-GAAP gross
profit
|
$
|
49,192
|
|
|
$
|
70,689
|
|
|
|
|
|
GAAP gross profit
as a % of revenue
|
22.2
|
%
|
|
31.4
|
%
|
Stock-based
compensation
|
0.2
|
|
|
0.2
|
|
Acquisition-related
costs
|
1.3
|
|
|
0.6
|
|
Restructuring
costs
|
0.6
|
|
|
0.1
|
|
Non-GAAP gross
profit as a % of revenue
|
24.3
|
%
|
|
32.3
|
%
|
|
|
|
|
GAAP operating
expenses
|
$
|
119,655
|
|
|
$
|
156,781
|
|
Stock-based
compensation
|
(10,441)
|
|
|
(12,630)
|
|
Acquisition-related
costs
|
(3)
|
|
|
(1,113)
|
|
Restructuring
costs
|
(15,499)
|
|
|
(12,062)
|
|
Non-GAAP operating
expenses
|
$
|
93,712
|
|
|
$
|
130,976
|
|
|
|
|
|
GAAP operating
loss
|
$
|
(74,739)
|
|
|
$
|
(88,215)
|
|
Stock-based
compensation
|
10,823
|
|
|
13,125
|
|
Acquisition-related
costs
|
2,658
|
|
|
2,348
|
|
Restructuring
costs
|
16,738
|
|
|
12,455
|
|
Non-GAAP operating
loss
|
$
|
(44,520)
|
|
|
$
|
(60,287)
|
|
|
Three months ended
March 31,
|
(in
thousands)
|
2018
|
|
2017
|
GAAP net
loss
|
$
|
(76,347)
|
|
$
|
(111,150)
|
Income tax (benefit)
expense
|
(2,782)
|
|
22,282
|
Interest expense,
net
|
4,212
|
|
761
|
Depreciation and
amortization
|
8,907
|
|
11,693
|
POP display
amortization
|
3,912
|
|
5,165
|
Stock-based
compensation
|
10,823
|
|
13,125
|
Restructuring
costs
|
16,738
|
|
12,455
|
Adjusted
EBITDA
|
$
|
(34,537)
|
|
$
|
(45,669)
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/gopro-announces-first-quarter-2018-results-300642309.html
SOURCE GoPro, Inc.