SAN MATEO, Calif., Feb. 4, 2021 /PRNewswire/ -- GoPro, Inc. (NASDAQ:
GPRO) today announced financial results for its fourth quarter and
full year ended December 31, 2020 and posted management
commentary on its investor relations website at
https://investor.gopro.com.
"GoPro's shift to a more subscription-centric consumer-direct
model is resulting in a simpler, more profitable business with
materially better cash generation," said Nicholas Woodman, GoPro's founder and CEO. "The
steps we've taken to improve our business during the pandemic
should serve us very well when the world begins to recover in
earnest — but as a business, fortunately we don't have to wait for
that to happen."
"GoPro generated more than $200
million in cash flow from operations in the second half,
fourth quarter subscriber growth of 52% sequentially, and we exited
the year with historically low levels of channel inventory. Our
subscription-based consumer-direct strategy is proving to be
successful and we look forward to continued gains in 2021," said
Brian McGee, GoPro CFO and
COO.
GoPro Q4 and Full Year 2020 Financial Results
- Revenue for Q4 2020 was $358
million, a 28% sequential improvement from $281 million in Q3 2020. Revenue for the full
year 2020 was $892 million compared
to $1.19 billion in 2019, down 25%
year-over-year.
- GAAP and non-GAAP gross margin for Q4 2020 was 38.0% and 38.3%,
respectively. GAAP and non-GAAP gross margin for 2020 both
increased 70 bps year-over-year to 35.3% and 36.1%,
respectively.
- Q4 2020 GAAP net income was $44
million, or $0.28 per share.
Q4 2020 non-GAAP net income was $61
million, or $0.39 per
share.
- 2020 GAAP net loss was $67
million compared to 2019 GAAP net loss of $15 million. 2020 non-GAAP net income was
$13 million compared to $35 million in 2019.
- Q4 2020 GAAP and non-GAAP operating expenses decreased 24% and
26% year-over-year to $81 million and
$73 million, respectively.
- 2020 GAAP and non-GAAP operating expenses decreased 15% and 21%
to $351 million and $298 million, respectively.
- Adjusted EBITDA for Q4 and full year 2020 was $68 million and $43
million, respectively.
- Cash and investments totaled $328
million at the end of 2020, of which $108 million was generated from operations in Q4
and $73.0 million was from the net
issuance of convertible notes.
GoPro Q4 2020 Highlights
- Ended 2020 with 761,000 GoPro subscribers, up 52% sequentially
and 145% year-over-year.
- GoPro.com generated a record $116
million in revenue in Q4, up 43% sequentially and 91%
year-over-year. Full year 2020 GoPro.com revenue doubled
year-over-year to $283 million.
- Camera unit sell-through was more than 1.2 million units in Q4,
and 3.6 million for the full year.
- Channel inventory reduced approximately 10% sequentially and
more than 50% since the start of 2020.
- Cameras with retail prices above $300 represented 91% of Q4 revenue.
- Q4 Street ASP increased 14% year-over-year to $323, while 2020 Street ASP increased 13% to
$316.
Results
Summary:
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
($ in thousands,
except per share amounts)
|
|
2020
|
|
2019
|
|
%
Change
|
|
2020
|
|
2019
|
|
%
Change
|
Revenue
|
|
$
|
357,772
|
|
|
$
|
528,345
|
|
|
(32.3)
|
%
|
|
$
|
891,925
|
|
|
$
|
1,194,651
|
|
|
(25.3)
|
%
|
Gross
margin
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
38.0
|
%
|
|
38.2
|
%
|
|
(20) bps
|
|
35.3
|
%
|
|
34.6
|
%
|
|
70 bps
|
Non-GAAP
|
|
38.3
|
%
|
|
38.6
|
%
|
|
(30) bps
|
|
36.1
|
%
|
|
35.4
|
%
|
|
70 bps
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
$
|
55,355
|
|
|
$
|
96,100
|
|
|
(42.4)
|
%
|
|
$
|
(36,819)
|
|
|
$
|
(2,333)
|
|
|
(1,478.2)
|
%
|
Non-GAAP
|
|
$
|
64,184
|
|
|
$
|
105,021
|
|
|
(38.9)
|
%
|
|
$
|
24,313
|
|
|
$
|
44,869
|
|
|
(45.8)
|
%
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
$
|
44,413
|
|
|
$
|
95,820
|
|
|
(53.6)
|
%
|
|
$
|
(66,783)
|
|
|
$
|
(14,642)
|
|
|
(356.1)
|
%
|
Non-GAAP
|
|
$
|
61,064
|
|
|
$
|
102,498
|
|
|
(40.4)
|
%
|
|
$
|
12,779
|
|
|
$
|
35,255
|
|
|
(63.8)
|
%
|
Diluted net income
(loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
$
|
0.28
|
|
|
$
|
0.65
|
|
|
(56.9)
|
%
|
|
$
|
(0.45)
|
|
|
$
|
(0.10)
|
|
|
(350.0)
|
%
|
Non-GAAP
|
|
$
|
0.39
|
|
|
$
|
0.70
|
|
|
(44.3)
|
%
|
|
$
|
0.08
|
|
|
$
|
0.24
|
|
|
(66.7)
|
%
|
Adjusted
EBITDA
|
|
$
|
67,744
|
|
|
$
|
112,092
|
|
|
(39.6)
|
%
|
|
$
|
43,200
|
|
|
$
|
71,958
|
|
|
(40.0)
|
%
|
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.
Prior to the start of the call, the Company will post Management
Commentary on the "Events & Presentations" section of its
investor relations website at https://investor.gopro.com.
Management will make brief opening comments before taking
questions.
To listen to the live conference call, please dial toll free
(888) 394-8218 or (646) 828-8193, access code 1965695,
approximately 15 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.
For more information, visit www.gopro.com. Members of
the press can access official brand and product images, logos and
reviewer guides by visiting GoPro's press portal. GoPro customers
can submit their photos, raw video clips and edits to GoPro Awards
for an opportunity to be featured on GoPro's social channels and
receive gear and cash awards. 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, HERO and their respective logos are trademarks or
registered trademarks of GoPro, Inc. in the United
States and other countries.
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
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. When planning,
forecasting and analyzing gross margin, operating expenses, other
income (expense), tax expense, net income (loss) 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 planned growth and
expansion of our total addressable market through new products and
subscription services; increased profitability in 2021 and beyond;
overall consumer demand, and the impact of the COVID-19 pandemic on
our business. 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 achieve
revenue growth or profitability in the future, and if revenue
growth or profitability is achieved, we may not be able to sustain
it; our ability to effectively manage our shift of sales strategy
to focus on our direct-to-consumer channel; the risk that we are
not able to increase the number of and retain our existing paying
subscribers; 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 plan to profitability depends in part
on further penetrating our total addressable market, and we may not
be successful in doing so; the risk that growing our
direct-to-consumer business while reducing our reliance on our
other sales channels could impact profitability; the impact of the
COVID-19 pandemic and its effect on the
United States and global economies and our business in
particular; 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; the fact that a small number of retailers and
distributors account for a substantial portion of our revenue and
our level of business with them could be significantly reduced due
to retail closures related to COVID-19; our transition away from
some distributors and retailers; our reliance on third party
suppliers, some of which are sole source suppliers, to provide
components for our products; 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 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,
2019, and Quarterly Report on Form 10-Q for the quarter ended
September 30, 2020, each of which is 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, 2020. 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)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue
|
$
|
357,772
|
|
|
$
|
528,345
|
|
|
$
|
891,925
|
|
|
$
|
1,194,651
|
|
Cost of
revenue
|
221,689
|
|
|
326,520
|
|
|
577,411
|
|
|
781,862
|
|
Gross
profit
|
136,083
|
|
|
201,825
|
|
|
314,514
|
|
|
412,789
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
27,515
|
|
|
31,679
|
|
|
131,589
|
|
|
142,894
|
|
Sales and
marketing
|
38,535
|
|
|
58,158
|
|
|
151,380
|
|
|
206,431
|
|
General and
administrative
|
14,678
|
|
|
15,888
|
|
|
68,364
|
|
|
65,797
|
|
Total operating
expenses
|
80,728
|
|
|
105,725
|
|
|
351,333
|
|
|
415,122
|
|
Operating income
(loss)
|
55,355
|
|
|
96,100
|
|
|
(36,819)
|
|
|
(2,333)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(5,483)
|
|
|
(5,197)
|
|
|
(20,257)
|
|
|
(19,229)
|
|
Other income
(expense), net
|
(5,343)
|
|
|
989
|
|
|
(4,881)
|
|
|
2,492
|
|
Total other expense,
net
|
(10,826)
|
|
|
(4,208)
|
|
|
(25,138)
|
|
|
(16,737)
|
|
Income (loss) before
income taxes
|
44,529
|
|
|
91,892
|
|
|
(61,957)
|
|
|
(19,070)
|
|
Income tax expense
(benefit)
|
116
|
|
|
(3,928)
|
|
|
4,826
|
|
|
(4,428)
|
|
Net income
(loss)
|
$
|
44,413
|
|
|
$
|
95,820
|
|
|
$
|
(66,783)
|
|
|
$
|
(14,642)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share
|
|
|
|
|
|
|
|
Basic
|
$
|
0.29
|
|
|
$
|
0.65
|
|
|
$
|
(0.45)
|
|
|
$
|
(0.10)
|
|
Diluted
|
$
|
0.28
|
|
|
$
|
0.65
|
|
|
$
|
(0.45)
|
|
|
$
|
(0.10)
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
150,663
|
|
|
146,625
|
|
|
149,037
|
|
|
144,891
|
|
Diluted
|
156,464
|
|
|
147,052
|
|
|
149,037
|
|
|
144,891
|
|
GoPro,
Inc.
Preliminary
Condensed Consolidated Balance Sheets
(unaudited)
|
|
(in
thousands)
|
December
31,
2020
|
|
December
31,
2019
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
325,654
|
|
|
$
|
150,301
|
|
Restricted
cash
|
2,000
|
|
|
—
|
|
Marketable
securities
|
—
|
|
|
14,847
|
|
Accounts receivable,
net
|
107,244
|
|
|
200,634
|
|
Inventory
|
97,914
|
|
|
144,236
|
|
Prepaid expenses and
other current assets
|
23,872
|
|
|
25,958
|
|
Total current
assets
|
556,684
|
|
|
535,976
|
|
Property and
equipment, net
|
23,711
|
|
|
36,539
|
|
Operating lease
right-of-use assets
|
31,560
|
|
|
53,121
|
|
Intangible assets,
net and goodwill
|
147,673
|
|
|
151,706
|
|
Other long-term
assets
|
11,771
|
|
|
15,461
|
|
Total
assets
|
$
|
771,399
|
|
|
$
|
792,803
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
111,399
|
|
|
$
|
160,695
|
|
Accrued expenses and
other current liabilities
|
113,776
|
|
|
141,790
|
|
Short-term operating
lease liabilities
|
9,369
|
|
|
9,099
|
|
Deferred
revenue
|
28,149
|
|
|
15,467
|
|
Total current
liabilities
|
262,693
|
|
|
327,051
|
|
Long-term
debt
|
218,172
|
|
|
148,810
|
|
Long-term operating
lease liabilities
|
51,986
|
|
|
62,961
|
|
Other long-term
liabilities
|
22,530
|
|
|
20,452
|
|
Total
liabilities
|
555,381
|
|
|
559,274
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock and
additional paid-in capital
|
980,147
|
|
|
930,875
|
|
Treasury stock, at
cost
|
(113,613)
|
|
|
(113,613)
|
|
Accumulated
deficit
|
(650,516)
|
|
|
(583,733)
|
|
Total stockholders'
equity
|
216,018
|
|
|
233,529
|
|
Total liabilities and
stockholders' equity
|
$
|
771,399
|
|
|
$
|
792,803
|
|
GoPro,
Inc.
Preliminary
Condensed Consolidated Statement of Cash Flows
(unaudited)
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
(in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Operating
activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
44,413
|
|
|
$
|
95,820
|
|
|
$
|
(66,783)
|
|
|
$
|
(14,642)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
3,570
|
|
|
6,445
|
|
|
19,065
|
|
|
26,268
|
|
Non-cash operating
lease cost
|
1,658
|
|
|
(609)
|
|
|
6,565
|
|
|
6,990
|
|
Stock-based
compensation
|
8,037
|
|
|
7,028
|
|
|
29,963
|
|
|
37,188
|
|
Deferred income
taxes
|
1
|
|
|
(45)
|
|
|
(50)
|
|
|
(32)
|
|
Non-cash restructuring
charges
|
—
|
|
|
—
|
|
|
5,242
|
|
|
(199)
|
|
Impairment of
right-of-use assets
|
—
|
|
|
—
|
|
|
12,460
|
|
|
—
|
|
Non-cash interest
expense
|
3,018
|
|
|
2,354
|
|
|
10,366
|
|
|
8,987
|
|
Loss on extinguishment
of debt
|
5,389
|
|
|
—
|
|
|
5,389
|
|
|
—
|
|
Other
|
334
|
|
|
(403)
|
|
|
1,072
|
|
|
(1,182)
|
|
Net changes in
operating assets and liabilities
|
39,833
|
|
|
(22,339)
|
|
|
70,493
|
|
|
(87,822)
|
|
Net cash provided by
(used in) operating activities
|
106,253
|
|
|
88,251
|
|
|
93,782
|
|
|
(24,444)
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment, net
|
(321)
|
|
|
(2,038)
|
|
|
(4,881)
|
|
|
(8,348)
|
|
Purchases of marketable
securities
|
—
|
|
|
—
|
|
|
—
|
|
|
(43,636)
|
|
Maturities of
marketable securities
|
—
|
|
|
5,150
|
|
|
14,830
|
|
|
56,888
|
|
Sale of marketable
securities
|
—
|
|
|
15,978
|
|
|
—
|
|
|
17,867
|
|
Asset
acquisition
|
—
|
|
|
—
|
|
|
(438)
|
|
|
—
|
|
Net cash provided by
(used in) investing activities
|
(321)
|
|
|
19,090
|
|
|
9,511
|
|
|
22,771
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Proceeds from issuance
of common stock
|
1,927
|
|
|
—
|
|
|
5,435
|
|
|
5,574
|
|
Taxes paid related to
net share settlement of equity awards
|
(1,494)
|
|
|
(820)
|
|
|
(6,207)
|
|
|
(6,618)
|
|
Proceeds from
issuance of 2025 convertible senior notes
|
143,750
|
|
|
—
|
|
|
143,750
|
|
|
—
|
|
Payment of debt
issuance costs
|
(4,752)
|
|
|
—
|
|
|
(4,752)
|
|
|
—
|
|
Purchase of capped
calls related to 2025 convertible senior notes
|
(10,249)
|
|
|
—
|
|
|
(10,249)
|
|
|
—
|
|
Payments for 2022
convertible senior notes partial repurchase
|
(56,000)
|
|
|
—
|
|
|
(56,000)
|
|
|
—
|
|
Proceeds from
borrowings
|
—
|
|
|
20,000
|
|
|
30,000
|
|
|
20,000
|
|
Repayment of
borrowings
|
—
|
|
|
(20,000)
|
|
|
(30,000)
|
|
|
(20,000)
|
|
Net cash provided by
(used in) financing activities
|
73,182
|
|
|
(820)
|
|
|
71,977
|
|
|
(1,044)
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
1,669
|
|
|
764
|
|
|
2,083
|
|
|
923
|
|
Net change in cash,
cash equivalents and restricted cash
|
180,783
|
|
|
107,285
|
|
|
177,353
|
|
|
(1,794)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
146,871
|
|
|
43,016
|
|
|
150,301
|
|
|
152,095
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
327,654
|
|
|
$
|
150,301
|
|
|
$
|
327,654
|
|
|
$
|
150,301
|
|
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 point of purchase
(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, first quarter of 2018 and second quarter of
2020, 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;
- adjusted EBITDA and non-GAAP net income (loss) exclude the loss
on extinguishment of debt because it is not related to our core
operating performance or reflective of ongoing operating results in
the period, and the frequency and amount of such losses are
inconsistent;
- 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)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP net income
(loss)
|
$
|
44,413
|
|
|
$
|
95,820
|
|
|
$
|
(66,783)
|
|
|
$
|
(14,642)
|
|
Stock-based
compensation:
|
|
|
|
|
|
|
|
Cost of
revenue
|
373
|
|
|
419
|
|
|
1,548
|
|
|
1,902
|
|
Research and
development
|
3,733
|
|
|
3,099
|
|
|
13,415
|
|
|
17,167
|
|
Sales and
marketing
|
1,672
|
|
|
1,525
|
|
|
5,779
|
|
|
8,043
|
|
General and
administrative
|
2,259
|
|
|
1,985
|
|
|
9,221
|
|
|
10,076
|
|
Total stock-based
compensation
|
8,037
|
|
|
7,028
|
|
|
29,963
|
|
|
37,188
|
|
|
|
|
|
|
|
|
|
Acquisition-related
costs:
|
|
|
|
|
|
|
|
Cost of
revenue
|
723
|
|
|
1,864
|
|
|
4,598
|
|
|
7,818
|
|
Total
acquisition-related costs
|
723
|
|
|
1,864
|
|
|
4,598
|
|
|
7,818
|
|
|
|
|
|
|
|
|
|
Restructuring and
other costs:
|
|
|
|
|
|
|
|
Cost of
revenue
|
11
|
|
|
—
|
|
|
1,281
|
|
|
87
|
|
Research and
development
|
159
|
|
|
29
|
|
|
8,542
|
|
|
910
|
|
Sales and
marketing
|
(264)
|
|
|
—
|
|
|
10,925
|
|
|
498
|
|
General and
administrative
|
163
|
|
|
—
|
|
|
5,823
|
|
|
701
|
|
Total restructuring
and other costs
|
69
|
|
|
29
|
|
|
26,571
|
|
|
2,196
|
|
|
|
|
|
|
|
|
|
Non-cash interest
expense
|
3,018
|
|
|
2,354
|
|
|
10,366
|
|
|
8,987
|
|
Loss on
extinguishment of debt
|
5,389
|
|
|
—
|
|
|
5,389
|
|
|
—
|
|
Income tax
adjustments
|
(585)
|
|
|
(4,597)
|
|
|
2,675
|
|
|
(6,292)
|
|
Non-GAAP net
income
|
$
|
61,064
|
|
|
$
|
102,498
|
|
|
$
|
12,779
|
|
|
$
|
35,255
|
|
|
|
|
|
|
|
|
|
GAAP shares for
diluted net income (loss) per share
|
156,464
|
|
|
147,052
|
|
|
149,037
|
|
|
144,891
|
|
Add: dilutive
shares
|
—
|
|
|
—
|
|
|
3,096
|
|
|
1,580
|
|
Non-GAAP shares
for diluted net income per share
|
156,464
|
|
|
147,052
|
|
|
152,133
|
|
|
146,471
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income (loss) per share
|
$
|
0.28
|
|
|
$
|
0.65
|
|
|
$
|
(0.45)
|
|
|
$
|
(0.10)
|
|
Non-GAAP diluted
net income per share
|
$
|
0.39
|
|
|
$
|
0.70
|
|
|
$
|
0.08
|
|
|
$
|
0.24
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
(dollars in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP gross profit
as a % of revenue
|
38.0
|
%
|
|
38.2
|
%
|
|
35.3
|
%
|
|
34.6
|
%
|
Stock-based
compensation
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
Acquisition-related
costs
|
0.2
|
|
|
0.3
|
|
|
0.5
|
|
|
0.6
|
|
Restructuring and
other costs
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
Non-GAAP gross
profit as a % of revenue
|
38.3
|
%
|
|
38.6
|
%
|
|
36.1
|
%
|
|
35.4
|
%
|
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$
|
80,728
|
|
|
$
|
105,725
|
|
|
$
|
351,333
|
|
|
$
|
415,122
|
|
Stock-based
compensation
|
(7,664)
|
|
|
(6,609)
|
|
|
(28,415)
|
|
|
(35,286)
|
|
Restructuring and
other costs
|
(58)
|
|
|
(29)
|
|
|
(25,290)
|
|
|
(2,109)
|
|
Non-GAAP operating
expenses
|
$
|
73,006
|
|
|
$
|
99,087
|
|
|
$
|
297,628
|
|
|
$
|
377,727
|
|
|
|
|
|
|
|
|
|
GAAP operating
income (loss)
|
$
|
55,355
|
|
|
$
|
96,100
|
|
|
$
|
(36,819)
|
|
|
$
|
(2,333)
|
|
Stock-based
compensation
|
8,037
|
|
|
7,028
|
|
|
29,963
|
|
|
37,188
|
|
Acquisition-related
costs
|
723
|
|
|
1,864
|
|
|
4,598
|
|
|
7,818
|
|
Restructuring and
other costs
|
69
|
|
|
29
|
|
|
26,571
|
|
|
2,196
|
|
Non-GAAP operating
income
|
$
|
64,184
|
|
|
$
|
105,021
|
|
|
$
|
24,313
|
|
|
$
|
44,869
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
(in
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP net income
(loss)
|
$
|
44,413
|
|
|
$
|
95,820
|
|
|
$
|
(66,783)
|
|
|
$
|
(14,642)
|
|
Income tax expense
(benefit)
|
116
|
|
|
(3,928)
|
|
|
4,826
|
|
|
(4,428)
|
|
Interest expense,
net
|
5,442
|
|
|
5,032
|
|
|
19,993
|
|
|
17,872
|
|
Depreciation and
amortization
|
3,570
|
|
|
6,445
|
|
|
19,065
|
|
|
26,268
|
|
POP display
amortization
|
708
|
|
|
1,666
|
|
|
4,176
|
|
|
7,504
|
|
Stock-based
compensation
|
8,037
|
|
|
7,028
|
|
|
29,963
|
|
|
37,188
|
|
Loss on extinguishment
of debt
|
5,389
|
|
|
—
|
|
|
5,389
|
|
|
—
|
|
Restructuring and
other costs
|
69
|
|
|
29
|
|
|
26,571
|
|
|
2,196
|
|
Adjusted
EBITDA
|
$
|
67,744
|
|
|
$
|
112,092
|
|
|
$
|
43,200
|
|
|
$
|
71,958
|
|
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SOURCE GoPro, Inc.