Revenue up 6% year-over-year to
$217 million
GAAP EPS of $0.04 and non-GAAP EPS of $0.09
GoPro Subscribers up 85% year-over-year to
1.74 million
Cash & Investments Increased 52%
year-over-year to $450 million
SAN
MATEO, Calif., May 5, 2022
/PRNewswire/ -- GoPro, Inc. (NASDAQ: GPRO) today announced
financial results for its first quarter ended March 31, 2022
and posted management commentary on the investor relations section
of its website at https://investor.gopro.com/.
"We hit the ground running in 2022, successfully growing
year-over-year revenue and profitability while launching exciting
new products," said Nicholas
Woodman, GoPro's founder and CEO. "With several additional
products slated for launch later this year, we expect to continue
this TAM-expanding trend."
"The first quarter of 2022 represents another quarter of GAAP
profitability, coinciding with GoPro's strategic shift to becoming
a more direct-to-consumer, subscription centric business back in
the second quarter of 2020," said Brian
McGee, GoPro's CFO and COO. "Over that period, we've
steadily grown revenue, gross margin and, importantly, GAAP
profitability as well as cash."
Q1 2022 Financial Results
- Revenue was $217 million, up 6%
year-over-year from $204
million.
- GoPro.com revenue, including subscription revenue, increased 8%
year-over-year to $89 million, or 41%
of total revenue. Subscription and service revenues totaled
$19 million, up 73%
year-over-year.
- GAAP and non-GAAP gross margin was 41.8% and 42.0%
respectively, up from the prior year period at 38.6% and 39.2%,
respectively.
- GAAP net income was $6 million,
or $0.04 per share, up from a net
loss of $10 million or $0.07 per share in the prior year period.
Non-GAAP net income was $15 million,
or $0.09 per share, up 214% from
$5 million, or $0.03 per share in the prior year period.
- Adjusted EBITDA was $21 million,
or 10% of revenue, compared to $11
million, or 5% of revenue in the prior year period.
- Cameras with retail prices at or above $400 represented 92% of Q1 2022 camera revenue,
up from 79% in Q1 2021.
- Q1 2022 Street ASP was $414, up
13% year-over-year.
Recent Business Highlights
- Launched Volta, a standalone premium battery and remote-control
grip that delivers more than four hours of recording at
4K 30 frames per second.
- Launched Creator Edition, an all-in-one content capturing
powerhouse that makes vlogging, filmmaking and live streaming
easier than ever by combing the power of HERO10 Black with GoPro
Mods and GoPro's new premium accessory, Volta.
- Launched GoPro Player + ReelSteady desktop app, a powerful, yet
easy-to-use desktop app with professional-level stabilization and
360 content tools for creators.
- Launched HERO 10 Black Bones, the ultimate no-compromise FPV
(First Person View) drone camera.
- Won a 2nd Technical & Engineering Emmy® Award from the
National Association of Television Arts & Sciences for GoPro's
innovation in in-camera sensor and software stabilization
technology.
- Expanded remote work options to two of GoPro's international
innovation hubs, Bucharest and
Paris, as part of GoPro's strategy
to attract and retain top talent.
|
Results
Summary:
|
|
|
|
Three months ended March 31,
|
($ in thousands, except per share amounts)
|
|
2022
|
|
2021
|
|
% Change
|
Revenue
|
|
$
216,705
|
|
$
203,680
|
|
6.4%
|
Gross margin
|
|
|
|
|
|
|
GAAP
|
|
41.8%
|
|
38.6%
|
|
320 bps
|
Non-GAAP
|
|
42.0%
|
|
39.2%
|
|
280 bps
|
Operating income (loss)
|
|
|
|
|
|
|
GAAP
|
|
$
8,162
|
|
$
(3,512)
|
|
(332.4)%
|
Non-GAAP
|
|
$
18,124
|
|
$
6,913
|
|
162.2%
|
Net income (loss)
|
|
|
|
|
|
|
GAAP
|
|
$
5,685
|
|
$
(10,168)
|
|
(155.9)%
|
Non-GAAP
|
|
$
15,196
|
|
$
4,835
|
|
214.3%
|
Diluted net income (loss) per
share
|
|
|
|
|
|
|
GAAP
|
|
$
0.04
|
|
$
(0.07)
|
|
(157.1)%
|
Non-GAAP
|
|
$
0.09
|
|
$
0.03
|
|
200.0%
|
Adjusted EBITDA
|
|
$
20,649
|
|
$
10,720
|
|
92.6%
|
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 call
+1 844-200-6205 (US) or
+1 929-526-1599 (International) and enter access
code 571477, 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, from approximately two
hours after the call through July 28,
2022.
About GoPro, Inc. (NASDAQ: GPRO)
Celebrating
its 20th anniversary in 2022, GoPro helps the world to capture and
share itself in immersive and exciting ways.
For more information, visit GoPro.com. Open roles can be found
on our careers page. Members of the press can access official logos
and imagery on our press portal. GoPro customers can submit their
photos and videos to GoPro Awards for an opportunity to be featured
on GoPro's social channels and receive gear and cash awards.
Connect with GoPro on Facebook, Instagram, LinkedIn, TikTok,
Twitter, YouTube, and GoPro's blog The Current.
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 blog The Current.
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
our direct-to-consumer and subscription-centric strategy to grow
revenue; our share repurchase plan; and overall consumer demand.
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 include our cumulative GAAP income from
the past three years may not be sustainable in future periods, we
may not be able to achieve our forecast, sustain revenue growth or
profitability, and our operating results may fluctuate
unpredictably; our ability to effectively grow our
direct-to-consumer and subscription business; our ability to
maintain the value and reputation of our brand and protect our
intellectual property and proprietary rights, the continuing impact
of the COVID-19 outbreak on the United
States and global economies could have a material adverse
impact on our business in particular; the risk that our sales fall
below our forecasts, especially during the holiday season; the risk
we fail to manage our operating expenses effectively, and may
result in our financial performance suffering 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 fact that sales of our cameras, mounts and accessories for
substantially all of our revenue, and any decrease in the sales or
change in sales mix of these products could harm our business; the
risk that growing our direct-to-consumer and subscription business
while reducing our reliance on our other sales channels could
impact profitability; any inability to successfully manage product
introductions, product transitions, product pricing and marketing;
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; our transition away from
some distributors and retailers; our reliance on third party
suppliers, some of which are sole source suppliers, to provide
services and components for our products which may be impacted due
to supply shortages, long lead times for components, and supply
changes, any of which could disrupt our supply chain and may
increase our costs such as increased freight rates or shipping
delays; the fact that an economic downturn or economic uncertainty
in our key U.S. and international markets, as well as fluctuations
in interest rates or currency exchange rates, may adversely affect
consumer discretionary spending; our ability to attract, engage and
retain qualified personnel; 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 experience fluctuating
revenue, expenses and profitability in the future; risks related to
inventory, purchase commitments and long-lived assets; difficulty
in attracting and retaining qualified personnel; the importance of
maintaining the value and reputation of our brand; 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,
2021, which is on file with the Securities and Exchange
Commission (SEC), and as updated in future filings with the SEC
including the Quarterly Report on Form 10-Q for the quarter ended
March 31, 2022. 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 Statements of
Operations (unaudited)
|
|
|
Three months ended March 31,
|
(in thousands, except per share
data)
|
2022
|
|
2021
|
Revenue
|
$
216,705
|
|
$
203,680
|
Cost of
revenue
|
126,229
|
|
124,984
|
Gross profit
|
90,476
|
|
78,696
|
|
|
|
|
Operating
expenses:
|
|
|
|
Research and development
|
31,598
|
|
32,430
|
Sales and marketing
|
35,373
|
|
35,790
|
General and administrative
|
15,343
|
|
13,988
|
Total operating
expenses
|
82,314
|
|
82,208
|
Operating income
(loss)
|
8,162
|
|
(3,512)
|
Other income
(expense):
|
|
|
|
Interest expense
|
(2,209)
|
|
(5,880)
|
Other expense, net
|
(319)
|
|
443
|
Total other expense,
net
|
(2,528)
|
|
(5,437)
|
Income (loss) before
income taxes
|
5,634
|
|
(8,949)
|
Income tax expense
(benefit)
|
(51)
|
|
1,219
|
Net income
(loss)
|
$
5,685
|
|
$
(10,168)
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
Basic
|
$
0.04
|
|
$
(0.07)
|
Diluted
|
$
0.04
|
|
$
(0.07)
|
|
|
|
|
Shares used to compute
net income (loss) per share:
|
|
|
|
Basic
|
156,864
|
|
152,181
|
Diluted
|
188,737
|
|
152,181
|
GoPro, Inc.
Preliminary Condensed Consolidated Balance Sheets
(unaudited)
|
|
(in thousands)
|
March 31,
2022
|
|
December 31,
2021
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash equivalents
|
$
305,319
|
|
$
401,087
|
Marketable securities
|
144,616
|
|
137,830
|
Accounts receivable, net
|
70,574
|
|
114,221
|
Inventory
|
119,396
|
|
86,409
|
Prepaid expenses and other current assets
|
26,869
|
|
42,311
|
Total current assets
|
666,774
|
|
781,858
|
Property and equipment,
net
|
17,294
|
|
19,003
|
Operating lease
right-of-use assets
|
25,642
|
|
27,320
|
Goodwill
|
146,459
|
|
146,459
|
Other long-term
assets
|
289,772
|
|
285,239
|
Total assets
|
$
1,145,941
|
|
$
1,259,879
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
|
$
82,925
|
|
$
171,545
|
Accrued expenses and other current liabilities
|
96,591
|
|
128,572
|
Short-term operating lease liabilities
|
9,859
|
|
9,819
|
Deferred revenue
|
43,914
|
|
42,505
|
Short-term debt
|
124,963
|
|
122,391
|
Total current
liabilities
|
358,252
|
|
474,832
|
Long-term
debt
|
140,304
|
|
111,289
|
Long-term operating
lease liabilities
|
40,203
|
|
43,025
|
Other long-term
liabilities
|
14,396
|
|
14,819
|
Total liabilities
|
553,155
|
|
643,965
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock and additional paid-in capital
|
935,674
|
|
1,008,872
|
Treasury stock, at cost
|
(123,613)
|
|
(113,613)
|
Accumulated deficit
|
(219,275)
|
|
(279,345)
|
Total stockholders'
equity
|
592,786
|
|
615,914
|
Total liabilities and
stockholders' equity
|
$
1,145,941
|
|
$
1,259,879
|
GoPro,
Inc. Preliminary Condensed Consolidated Statements of
Cash Flows (unaudited)
|
|
|
Three months ended March 31,
|
(in thousands)
|
2022
|
|
2021
|
Operating activities:
|
|
|
|
Net income
(loss)
|
$
5,685
|
|
$
(10,168)
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities
:
|
|
|
|
Depreciation and amortization
|
2,302
|
|
3,534
|
Non-cash operating lease cost
|
1,678
|
|
920
|
Stock-based compensation
|
9,836
|
|
8,869
|
Deferred income taxes
|
2,931
|
|
(2)
|
Non-cash restructuring charges
|
—
|
|
(99)
|
Non-cash interest expense
|
—
|
|
3,433
|
Other
|
1,004
|
|
112
|
Net
changes in operating assets and liabilities
|
(96,843)
|
|
(32,091)
|
Net cash used in operating
activities
|
(73,407)
|
|
(25,492)
|
|
|
|
|
Investing activities:
|
|
|
|
Purchases of property
and equipment, net
|
(520)
|
|
(1,068)
|
Purchases of marketable
securities
|
(23,111)
|
|
—
|
Maturities of
marketable securities
|
15,900
|
|
—
|
Net cash used in investing
activities
|
(7,731)
|
|
(1,068)
|
|
|
|
|
Financing activities:
|
|
|
|
Proceeds from issuance
of common stock
|
2,599
|
|
2,998
|
Taxes paid related to
net share settlement of equity awards
|
(7,175)
|
|
(6,246)
|
Repurchase of
outstanding common stock
|
(10,000)
|
|
—
|
Net cash used in financing
activities
|
(14,576)
|
|
(3,248)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(54)
|
|
(1,092)
|
Net change in cash,
cash equivalents and restricted cash
|
(95,768)
|
|
(30,900)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
401,087
|
|
327,654
|
Cash, cash equivalents
and restricted cash at end of period
|
$
305,319
|
|
$
296,754
|
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
restructuring and other related costs which primarily include
severance-related costs, stock-based compensation expenses,
facilities consolidation charges recorded in connection with
restructuring actions, including right-of-use asset impairment
charges, 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 reflective of ongoing
operating results in the period, and such losses vary in the
frequency and amount;
- 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 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.
Prior to the adoption of ASU 2020-06 in fiscal year 2022, we were
required to recognize non-cash interest expense related to the
amortization of a debt discount associated with our 2022 Notes and
2025 Notes in accordance with the prior authoritative accounting
guidance for convertible debt that may be settled in cash. From
fiscal year 2022 and onwards, this debt discount accounting
requirement was removed, and as a result non-cash interest expense
will no longer be a reconciling item between GAAP and non-GAAP net
income (loss);
- 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 March 31,
|
(in thousands, except per share
data)
|
2022
|
|
2021
|
GAAP net income (loss)
|
$
5,685
|
|
$
(10,168)
|
Stock-based
compensation:
|
|
|
|
Cost of revenue
|
447
|
|
429
|
Research and development
|
4,158
|
|
4,136
|
Sales and marketing
|
2,123
|
|
1,865
|
General and administrative
|
3,108
|
|
2,439
|
Total stock-based
compensation
|
9,836
|
|
8,869
|
|
|
|
|
Acquisition-related
costs:
|
|
|
|
Cost of revenue
|
47
|
|
723
|
Total acquisition-related
costs
|
47
|
|
723
|
|
|
|
|
Restructuring and other
costs:
|
|
|
|
Cost of revenue
|
5
|
|
50
|
Research and development
|
39
|
|
441
|
Sales and marketing
|
22
|
|
199
|
General and administrative
|
13
|
|
143
|
Total restructuring and other
costs
|
79
|
|
833
|
|
|
|
|
Non-cash interest
expense
|
—
|
|
3,433
|
Income tax
adjustments
|
(451)
|
|
1,145
|
Non-GAAP net income
|
$
15,196
|
|
$
4,835
|
|
|
|
|
GAAP shares for diluted net income (loss) per
share
|
188,737
|
|
152,181
|
Add: Non-GAAP only dilutive securities
|
—
|
|
7,671
|
Non-GAAP shares for diluted net income per
share
|
188,737
|
|
159,852
|
|
|
|
|
GAAP diluted net income (loss) per
share
|
$
0.04
|
|
$
(0.07)
|
Non-GAAP diluted net income per
share
|
$
0.09
|
|
$
0.03
|
|
Three months ended March 31,
|
(dollars in thousands)
|
2022
|
|
2021
|
GAAP gross profit as a % of
revenue
|
41.8%
|
|
38.6%
|
Stock-based compensation
|
0.2
|
|
0.2
|
Acquisition-related costs
|
—
|
|
0.4
|
Non-GAAP gross profit as a % of revenue
|
42.0%
|
|
39.2%
|
|
|
|
|
GAAP operating expenses
|
$
82,314
|
|
$
82,208
|
Stock-based compensation
|
(9,389)
|
|
(8,440)
|
Restructuring and other costs
|
(74)
|
|
(783)
|
Non-GAAP operating expenses
|
$
72,851
|
|
$
72,985
|
|
|
|
|
GAAP operating income (loss)
|
$
8,162
|
|
$
(3,512)
|
Stock-based compensation
|
9,836
|
|
8,869
|
Acquisition-related costs
|
47
|
|
723
|
Restructuring and other costs
|
79
|
|
833
|
Non-GAAP operating income
|
$
18,124
|
|
$
6,913
|
|
Three months ended March 31,
|
(in thousands)
|
2022
|
|
2021
|
GAAP net income (loss)
|
$
5,685
|
|
$
(10,168)
|
Income tax expense
|
(51)
|
|
1,219
|
Interest expense, net
|
2,111
|
|
5,796
|
Depreciation and amortization
|
2,302
|
|
3,534
|
POP
display amortization
|
687
|
|
637
|
Stock-based compensation
|
9,836
|
|
8,869
|
Restructuring and other costs
|
79
|
|
833
|
Adjusted EBITDA
|
$
20,649
|
|
$
10,720
|
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SOURCE GoPro, Inc.