SAN MATEO, Calif., Feb. 5, 2020 /PRNewswire/ -- GoPro, Inc. (NASDAQ:
GPRO) today announced financial results for its fourth quarter and
full year ended December 31, 2019.
"GoPro achieved both revenue growth and full year non-GAAP
profitability in 2019 due to strong sell-through throughout the
year and the Fall launch of our two new flagships, HERO8 Black and
MAX," said GoPro founder and CEO Nicholas
Woodman. "We believe we are well positioned to meaningfully
expand both margin and EPS in 2020 thanks to the strength of our
entire product line, high-margin Plus subscription service and app
monetization strategy."
Additionally, Brian McGee, who
has served as GoPro's Chief Financial Officer since March 2016, has been appointed to Chief Operating
Officer in addition to his ongoing role as Chief Financial Officer,
effective February 3, 2020. "Brian
has proven himself to be a tremendously important leader at GoPro
with a deep understanding of our business. All of us at GoPro are
excited to work with Brian in his new, expanded role," added
Woodman.
Recent GoPro Highlights
- Revenue for the full year 2019 was $1.195 billion, up 4% year-over-year.
Excluding our aerial business, revenue would have increased 7%
year-over-year.
- Revenue for Q4 2019 was $528
million, up 40% year-over-year.
- GAAP gross margin for Q4 2019 was 38.2%, up from 37.7%
year-over-year. Non-GAAP gross margin for Q4 2019 was
38.6%, up from 38.4% in the prior year.
- Q4 2019 GAAP net income was $96
million, or $0.65 per
share. Non-GAAP net income was $102 million, or
$0.70 per share. On a
year-over-year basis, GAAP net income increased by $64 million. 2019 GAAP net loss was $15 million, or $0.10 per share. 2019 non-GAAP net income was
$35 million. On a year-over-year
basis, non-GAAP net income increased $67
million.
- Q4 2019 GAAP operating expenses of $106 million decreased 3%
year-over-year. Q4 2019 non-GAAP operating expenses remained
flat year-over-year at $99
million.
- Cash and investments totaled $165
million at the end of Q4 2019.
- Adjusted EBITDA for the full year 2019 was $72 million, a 230% increase
year-over-year.
- GoPro.com represented more than 10% of revenue in 2019,
growing more than 40% year-over-year.
- In the US, HERO8 Black was the No. 1 selling camera in all
of digital imaging by unit volume in Q4 2019, according to the NPD
Group.
- In the US, GoPro captured 93% dollar share of the action
camera category in Q4 2019, according to the NPD Group.
- In 2019, 90% of GoPro's revenue came from the $300 and above price band, up from 62% in
2018.
- In Q4 2019, MAX captured 54% and 66% unit and dollar share,
respectively, of the spherical camera market in the US, according
to NPD Group. Collectively, MAX and Fusion captured 62% unit
and 72% dollar share of the spherical camera market in the US in Q4
2019, up from 14% and 38% respectively, year-over-year, according
to NPD Group.
- GoPro's Plus subscription service surpassed 334,000 active
paying subscribers as of January 31,
2020, up 10% since our Q3 2019 Earnings Release dated
November 7, 2019, and up 69%
year-over-year.
- In Europe, during Q4 2019,
GoPro had four of the top five cameras in the action camera
category, and in the $200 and
above price band of the action camera category, GoPro held 83%
dollar share and 82% market share in units, according to GfK.
- In China, GoPro
sell-through increased by 42% and 21%, by units and dollars,
respectively in Q4 2019, year-over-year, according to GfK.
- In Japan, GoPro market
share of the action camera category increased from 57% to 61% and
68% to 73% in units and dollars respectively in Q4 2019,
year-over-year, according to GfK.
- In Korea, GoPro market share of the action camera category
increased from 36% to 44% and 53% to 59% in units and dollars
respectively in Q4 2019, year-over-year, according to GfK.
- In Thailand, GoPro market
share of the action camera category increased from 57% to 66% and
87% to 91% in units and dollars respectively in Q4 2019,
year-over-year, according to GfK.
- Organic viewership of GoPro content across all channels
achieved an all-time high in 2019, with more than 2 million organic
views per day across all channels in 2019, 737 million organic
non-paid views in total, a 29% increase year-over-year.
- GoPro's Million Dollar Challenge Campaign generated a record
42,000 customer content submissions, a 68% increase
year-over-year, and in the first week, the highlight reel
garnered more than five times the views, year-over-year.
- Social followers across all channels increased by 4.2
million in 2019, up 29% year-over-year.
- In Q4 of 2019, usage of the GoPro App's automatic editing
tools grew 400% year-over-year.
Results Summary:
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
($ in thousands,
except per share amounts)
|
2019
|
|
2018
|
|
%
Change
|
|
2019
|
|
2018
|
|
%
Change
|
Revenue
|
$
|
528,345
|
|
|
$
|
377,378
|
|
|
40.0
|
%
|
|
$
|
1,194,651
|
|
|
$
|
1,148,337
|
|
|
4.0
|
%
|
Gross
margin
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
38.2
|
%
|
|
37.7
|
%
|
|
50 bps
|
|
34.6
|
%
|
|
31.5
|
%
|
|
310 bps
|
Non-GAAP
|
38.6
|
%
|
|
38.4
|
%
|
|
20 bps
|
|
35.4
|
%
|
|
32.8
|
%
|
|
260 bps
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
$
|
96,100
|
|
|
$
|
32,967
|
|
|
191.5
|
%
|
|
$
|
(2,333)
|
|
|
$
|
(93,962)
|
|
|
97.5
|
%
|
Non-GAAP
|
$
|
105,021
|
|
|
$
|
46,001
|
|
|
128.3
|
%
|
|
$
|
44,869
|
|
|
$
|
(18,876)
|
|
|
337.7
|
%
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
$
|
95,820
|
|
|
$
|
31,671
|
|
|
202.5
|
%
|
|
$
|
(14,642)
|
|
|
$
|
(109,034)
|
|
|
86.6
|
%
|
Non-GAAP
|
$
|
102,498
|
|
|
$
|
42,356
|
|
|
142.0
|
%
|
|
$
|
35,255
|
|
|
$
|
(31,909)
|
|
|
210.5
|
%
|
Diluted net income
(loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
$
|
0.65
|
|
|
$
|
0.22
|
|
|
195.5
|
%
|
|
$
|
(0.10)
|
|
|
$
|
(0.78)
|
|
|
87.2
|
%
|
Non-GAAP
|
$
|
0.70
|
|
|
$
|
0.30
|
|
|
133.3
|
%
|
|
$
|
0.24
|
|
|
$
|
(0.23)
|
|
|
204.3
|
%
|
Adjusted
EBITDA
|
$
|
112,092
|
|
|
$
|
58,807
|
|
|
90.6
|
%
|
|
$
|
71,958
|
|
|
$
|
21,778
|
|
|
230.4
|
%
|
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
(888) 204-4368 or (720) 543-0214, access code 1126503,
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
https://investor.gopro.com. A recording of the webcast will be
available on GoPro's website, https://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, TikTok,
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, TikTok
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), other income (expense), tax
expense, 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 and other related costs,
non-cash interest expense, gain on sale and license of intellectual
property and the tax impact of these items.
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 planned growth and
increased profitability in 2020 and beyond. 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 our ability to effectively manage
the Q3 2019 late stage production delay, 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 and our reliance on third party logistics partners to
deliver without interruption; our dependence on sales of our
cameras, mounts and accessories, and subscription services for
substantially all of our revenue (and the effects of changes in the
sales mix or decrease in demand for these products); the fact that
an economic downturn or economic uncertainty in our key U.S. and
international markets, as well as fluctuations in currency exchange
rates, may adversely affect consumer discretionary spending; any
changes to trade agreements, trade policies, tariffs, and
import/export regulations; the effects of transferring most
U.S.-bound production out of China; the effects of the highly competitive
market in which we operate, including new market entrants; 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; the risk that the e-commerce technology
systems that give consumers the ability to shop online do not
function effectively; the risk that we will encounter problems with
our distribution system; the threat of a security breach or other
disruption including cyberattacks; the concern that our
intellectual property and proprietary rights may not adequately
protect our products and services; and other factors detailed in
the Risk Factors section of our Annual Report on Form 10-K for the
year ended December 31, 2018, and
Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, each of which are on file
with the Securities and Exchange Commission (SEC), and as updated
in future filings with the SEC including the Annual Report on Form
10-K for the year ended December 31,
2019. 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,
|
|
Year ended
December 31,
|
(in thousands,
except per share data)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenue
|
$
|
528,345
|
|
|
$
|
377,378
|
|
|
$
|
1,194,651
|
|
|
$
|
1,148,337
|
|
Cost of
revenue
|
326,520
|
|
|
235,261
|
|
|
781,862
|
|
|
786,903
|
|
Gross
profit
|
201,825
|
|
|
142,117
|
|
|
412,789
|
|
|
361,434
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
31,679
|
|
|
36,935
|
|
|
142,894
|
|
|
167,296
|
|
Sales and
marketing
|
58,158
|
|
|
56,799
|
|
|
206,431
|
|
|
222,096
|
|
General and
administrative
|
15,888
|
|
|
15,416
|
|
|
65,797
|
|
|
66,004
|
|
Total operating
expenses
|
105,725
|
|
|
109,150
|
|
|
415,122
|
|
|
455,396
|
|
Operating income
(loss)
|
96,100
|
|
|
32,967
|
|
|
(2,333)
|
|
|
(93,962)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(5,197)
|
|
|
(4,879)
|
|
|
(19,229)
|
|
|
(18,683)
|
|
Other income,
net
|
989
|
|
|
5,238
|
|
|
2,492
|
|
|
4,970
|
|
Total other
expense, net
|
(4,208)
|
|
|
359
|
|
|
(16,737)
|
|
|
(13,713)
|
|
Income (loss) before
income taxes
|
91,892
|
|
|
33,326
|
|
|
(19,070)
|
|
|
(107,675)
|
|
Income tax (benefit)
expense
|
(3,928)
|
|
|
1,655
|
|
|
(4,428)
|
|
|
1,359
|
|
Net income
(loss)
|
$
|
95,820
|
|
|
$
|
31,671
|
|
|
$
|
(14,642)
|
|
|
$
|
(109,034)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share
|
|
|
|
|
|
|
|
Basic
|
$
|
0.65
|
|
|
$
|
0.22
|
|
|
$
|
(0.10)
|
|
|
$
|
(0.78)
|
|
Diluted
|
$
|
0.65
|
|
|
$
|
0.22
|
|
|
$
|
(0.10)
|
|
|
$
|
(0.78)
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
146,625
|
|
|
140,882
|
|
|
144,891
|
|
|
139,495
|
|
Diluted
|
147,052
|
|
|
143,401
|
|
|
144,891
|
|
|
139,495
|
|
|
|
|
GoPro,
Inc.
|
Preliminary
Condensed Consolidated Balance Sheets
|
(unaudited)
|
|
(in
thousands)
|
December 31, 2019
|
|
December 31, 2018
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
150,301
|
|
|
$
|
152,095
|
|
Marketable
securities
|
14,847
|
|
|
45,417
|
|
Accounts receivable,
net
|
200,634
|
|
|
129,216
|
|
Inventory
|
144,236
|
|
|
116,458
|
|
Prepaid expenses and
other current assets
|
25,958
|
|
|
30,887
|
|
Total current
assets
|
535,976
|
|
|
474,073
|
|
Property and
equipment, net
|
36,539
|
|
|
46,567
|
|
Operating lease
right-of-use assets
|
53,121
|
|
|
—
|
|
Intangible assets,
net and goodwill
|
151,706
|
|
|
159,524
|
|
Other long-term
assets
|
15,461
|
|
|
18,195
|
|
Total
assets
|
$
|
792,803
|
|
|
$
|
698,359
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
160,695
|
|
|
$
|
148,478
|
|
Accrued expenses and
other current liabilities
|
141,790
|
|
|
135,892
|
|
Short-term operating
lease liabilities
|
9,099
|
|
|
—
|
|
Deferred
revenue
|
15,467
|
|
|
15,129
|
|
Total current
liabilities
|
327,051
|
|
|
299,499
|
|
Long-term
debt
|
148,810
|
|
|
138,992
|
|
Long-term operating
lease liabilities
|
62,961
|
|
|
—
|
|
Other long-term
liabilities
|
20,452
|
|
|
47,756
|
|
Total
liabilities
|
559,274
|
|
|
486,247
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock and
additional paid-in capital
|
930,875
|
|
|
894,755
|
|
Treasury stock, at
cost
|
(113,613)
|
|
|
(113,613)
|
|
Accumulated
deficit
|
(583,733)
|
|
|
(569,030)
|
|
Total stockholders'
equity
|
233,529
|
|
|
212,112
|
|
Total liabilities and
stockholders' equity
|
$
|
792,803
|
|
|
$
|
698,359
|
|
|
|
|
GoPro,
Inc.
|
Preliminary
Condensed Consolidated Statement of Cash Flows
|
(unaudited)
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
(in
thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Operating
activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
95,820
|
|
|
$
|
31,671
|
|
|
$
|
(14,642)
|
|
|
$
|
(109,034)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
6,445
|
|
|
7,290
|
|
|
26,268
|
|
|
35,063
|
|
Amortization of
leased assets
|
(609)
|
|
|
—
|
|
|
6,990
|
|
|
—
|
|
Stock-based
compensation
|
7,028
|
|
|
9,716
|
|
|
37,188
|
|
|
40,887
|
|
Deferred income
taxes
|
(45)
|
|
|
598
|
|
|
(32)
|
|
|
(389)
|
|
Non-cash
restructuring charges
|
—
|
|
|
494
|
|
|
(199)
|
|
|
6,282
|
|
Non-cash interest
expense
|
2,354
|
|
|
2,124
|
|
|
8,987
|
|
|
8,112
|
|
Sale and license of
intellectual property
|
—
|
|
|
(5,000)
|
|
|
—
|
|
|
(5,000)
|
|
Other
|
(403)
|
|
|
1,997
|
|
|
(1,182)
|
|
|
1,696
|
|
Net changes in
operating assets and liabilities
|
(22,339)
|
|
|
(477)
|
|
|
(87,822)
|
|
|
(20,051)
|
|
Net cash provided by
(used in) operating activities
|
88,251
|
|
|
48,413
|
|
|
(24,444)
|
|
|
(42,434)
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment, net
|
(2,038)
|
|
|
(2,800)
|
|
|
(8,348)
|
|
|
(11,004)
|
|
Purchases of
marketable securities
|
—
|
|
|
(42,835)
|
|
|
(43,636)
|
|
|
(57,731)
|
|
Maturities of
marketable securities
|
5,150
|
|
|
2,500
|
|
|
56,888
|
|
|
57,500
|
|
Sale of marketable
securities
|
15,978
|
|
|
—
|
|
|
17,867
|
|
|
—
|
|
Proceeds from the
sale and license of intellectual property
|
—
|
|
|
5,000
|
|
|
—
|
|
|
5,000
|
|
Net cash provided by
(used in) investing activities
|
19,090
|
|
|
(38,135)
|
|
|
22,771
|
|
|
(6,235)
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Proceeds from
issuance of common stock
|
—
|
|
|
38
|
|
|
5,574
|
|
|
5,169
|
|
Taxes paid related to
net share settlement of equity awards
|
(820)
|
|
|
(1,262)
|
|
|
(6,618)
|
|
|
(6,650)
|
|
Proceeds from
borrowings
|
20,000
|
|
|
—
|
|
|
20,000
|
|
|
—
|
|
Repayment of
borrowings
|
(20,000)
|
|
|
—
|
|
|
(20,000)
|
|
|
—
|
|
Net cash used in
financing activities
|
(820)
|
|
|
(1,224)
|
|
|
(1,044)
|
|
|
(1,481)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
764
|
|
|
(205)
|
|
|
923
|
|
|
(259)
|
|
Net change in cash
and cash equivalents
|
107,285
|
|
|
8,849
|
|
|
(1,794)
|
|
|
(50,409)
|
|
Cash and cash
equivalents at beginning of period
|
43,016
|
|
|
143,246
|
|
|
152,095
|
|
|
202,504
|
|
Cash and cash
equivalents at end of period
|
$
|
150,301
|
|
|
$
|
152,095
|
|
|
$
|
150,301
|
|
|
$
|
152,095
|
|
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), other income
(expense), tax expense, 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 other
income (expense), non-GAAP tax expense, 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 and other related costs which primarily include
severance-related costs, stock-based compensation expenses,
facilities consolidation charges recorded in connection with
restructuring actions announced in the fourth quarter of 2016,
first quarter of 2017 and first quarter of 2018, and the related
ongoing operating lease cost of those facilities recorded under
Accounting Standards Codification 842, Leases. 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. Although we exclude the amortization of
acquired intangible assets from our non-GAAP net income (loss),
management believes that it is important for investors to
understand that such intangible assets were recorded as part of
purchase accounting and contribute to revenue generation;
- 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. We utilize 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,
|
|
Year ended
December 31,
|
(in thousands,
except per share data)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP net income
(loss)
|
$
|
95,820
|
|
|
$
|
31,671
|
|
|
$
|
(14,642)
|
|
|
$
|
(109,034)
|
|
Stock-based
compensation:
|
|
|
|
|
|
|
|
Cost of
revenue
|
419
|
|
|
548
|
|
|
1,902
|
|
|
1,954
|
|
Research and
development
|
3,099
|
|
|
4,694
|
|
|
17,167
|
|
|
19,636
|
|
Sales and
marketing
|
1,525
|
|
|
1,970
|
|
|
8,043
|
|
|
9,459
|
|
General and
administrative
|
1,985
|
|
|
2,504
|
|
|
10,076
|
|
|
9,838
|
|
Total stock-based
compensation
|
7,028
|
|
|
9,716
|
|
|
37,188
|
|
|
40,887
|
|
|
|
|
|
|
|
|
|
Acquisition-related
costs:
|
|
|
|
|
|
|
|
Cost of
revenue
|
1,864
|
|
|
2,082
|
|
|
7,818
|
|
|
11,434
|
|
General and
administrative
|
—
|
|
|
19
|
|
|
—
|
|
|
22
|
|
Total
acquisition-related costs
|
1,864
|
|
|
2,101
|
|
|
7,818
|
|
|
11,456
|
|
|
|
|
|
|
|
|
|
Restructuring and
other costs:
|
|
|
|
|
|
|
|
Cost of
revenue
|
—
|
|
|
22
|
|
|
87
|
|
|
1,379
|
|
Research and
development
|
29
|
|
|
762
|
|
|
910
|
|
|
12,794
|
|
Sales and
marketing
|
—
|
|
|
249
|
|
|
498
|
|
|
5,291
|
|
General and
administrative
|
—
|
|
|
184
|
|
|
701
|
|
|
3,279
|
|
Total restructuring
and other costs
|
29
|
|
|
1,217
|
|
|
2,196
|
|
|
22,743
|
|
|
|
|
|
|
|
|
|
Non-cash interest
expense
|
2,354
|
|
|
2,124
|
|
|
8,987
|
|
|
8,112
|
|
Gain on sale and
license of intellectual property
|
—
|
|
|
(5,000)
|
|
|
—
|
|
|
(5,000)
|
|
Income tax
adjustments
|
(4,597)
|
|
|
527
|
|
|
(6,292)
|
|
|
(1,073)
|
|
Non-GAAP net
income (loss)
|
$
|
102,498
|
|
|
$
|
42,356
|
|
|
$
|
35,255
|
|
|
$
|
(31,909)
|
|
|
|
|
|
|
|
|
|
GAAP shares for
diluted net income (loss) per share
|
147,052
|
|
|
143,401
|
|
|
144,891
|
|
|
139,495
|
|
Add: dilutive
shares
|
—
|
|
|
—
|
|
|
1,580
|
|
|
—
|
|
Non-GAAP shares
for diluted net income (loss) per share
|
147,052
|
|
|
143,401
|
|
|
146,471
|
|
|
139,495
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income (loss) per share
|
$
|
0.65
|
|
|
$
|
0.22
|
|
|
$
|
(0.10)
|
|
|
$
|
(0.78)
|
|
Non-GAAP diluted
net income (loss) per share
|
$
|
0.70
|
|
|
$
|
0.30
|
|
|
$
|
0.24
|
|
|
$
|
(0.23)
|
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
(dollars in
thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP gross profit
as a % of revenue
|
38.2
|
%
|
|
37.7
|
%
|
|
34.6
|
%
|
|
31.5
|
%
|
Stock-based
compensation
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
Acquisition-related
costs
|
0.3
|
|
|
0.6
|
|
|
0.6
|
|
|
1.0
|
|
Restructuring and
other costs
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
Non-GAAP gross
profit as a % of revenue
|
38.6
|
%
|
|
38.4
|
%
|
|
35.4
|
%
|
|
32.8
|
%
|
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$
|
105,725
|
|
|
$
|
109,150
|
|
|
$
|
415,122
|
|
|
$
|
455,396
|
|
Stock-based
compensation
|
(6,609)
|
|
|
(9,168)
|
|
|
(35,286)
|
|
|
(38,933)
|
|
Acquisition-related
costs
|
—
|
|
|
(19)
|
|
|
—
|
|
|
(22)
|
|
Restructuring and
other costs
|
(29)
|
|
|
(1,195)
|
|
|
(2,109)
|
|
|
(21,364)
|
|
Non-GAAP operating
expenses
|
$
|
99,087
|
|
|
$
|
98,768
|
|
|
$
|
377,727
|
|
|
$
|
395,077
|
|
|
|
|
|
|
|
|
|
GAAP operating
income (loss)
|
$
|
96,100
|
|
|
$
|
32,967
|
|
|
$
|
(2,333)
|
|
|
$
|
(93,962)
|
|
Stock-based
compensation
|
7,028
|
|
|
9,716
|
|
|
37,188
|
|
|
40,887
|
|
Acquisition-related
costs
|
1,864
|
|
|
2,101
|
|
|
7,818
|
|
|
11,456
|
|
Restructuring and
other costs
|
29
|
|
|
1,217
|
|
|
2,196
|
|
|
22,743
|
|
Non-GAAP operating
income (loss)
|
$
|
105,021
|
|
|
$
|
46,001
|
|
|
$
|
44,869
|
|
|
$
|
(18,876)
|
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
(in
thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP net income
(loss)
|
$
|
95,820
|
|
|
$
|
31,671
|
|
|
$
|
(14,642)
|
|
|
$
|
(109,034)
|
|
Income tax (benefit)
expense
|
(3,928)
|
|
|
1,655
|
|
|
(4,428)
|
|
|
1,359
|
|
Interest expense,
net
|
5,032
|
|
|
4,470
|
|
|
17,872
|
|
|
17,278
|
|
Depreciation and
amortization
|
6,445
|
|
|
7,290
|
|
|
26,268
|
|
|
35,063
|
|
POP display
amortization
|
1,666
|
|
|
2,788
|
|
|
7,504
|
|
|
13,482
|
|
Stock-based
compensation
|
7,028
|
|
|
9,716
|
|
|
37,188
|
|
|
40,887
|
|
Restructuring and
other costs
|
29
|
|
|
1,217
|
|
|
2,196
|
|
|
22,743
|
|
Adjusted
EBITDA
|
$
|
112,092
|
|
|
$
|
58,807
|
|
|
$
|
71,958
|
|
|
$
|
21,778
|
|
Reconciliations of
non-GAAP financial measures are set forth below:
|
|
|
2020
|
GAAP gross
margin
|
37.4% -
38.4%
|
Stock-based
compensation
|
0.2
|
Acquisition-related
costs
|
0.4
|
Non-GAAP gross
margin
|
38.0% -
39.0%
|
|
|
2020
|
GAAP net income
per share
|
$0.01 -
$0.11
|
Stock-based
compensation
|
0.26
|
Acquisition-related
costs
|
0.03
|
Non-cash interest
expense
|
0.07
|
Income tax
adjustments
|
0.03
|
Non-GAAP net
income per share
|
$0.40 -
$0.50
|
|
(in
thousands)
|
2020
|
GAAP net
income
|
$2,000 -
$17,000
|
Stock-based
compensation
|
38,400
|
Depreciation and
amortization
|
22,800
|
Interest (income)
expense, net
|
19,800
|
POP display
amortization
|
5,800
|
Income tax
expense
|
6,200
|
Adjusted
EBITDA
|
$95,000 -
$110,000
|
|
(in
thousands)
|
First quarter of
2020
|
GAAP net
income
|
$(54,800) -
$(64,800)
|
Stock-based
compensation
|
9,600
|
Acquisition-related
costs
|
1,900
|
Non-cash interest
expense
|
2,400
|
Income tax
adjustments
|
900
|
Non-GAAP net
income
|
$(40,000) -
$(50,000)
|
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SOURCE GoPro, Inc.