GoPro, Inc 8-K, filed May 7, 2020

GoPro, Inc. (GPRO)

8-K 2020-05-07 For: 2020-05-07

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Added on April 09, 2026

About this 8-K

GoPro, Inc filed this 8-K on May 7, 2020.

Items reported

Item 2.02: Financial results
Item 7.01: Regulation FD disclosure
Item 9.01: Financial statements and exhibits

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Delaware	001-36514	77-0629474
(State or Other Jurisdiction of Incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock	GPRO	NASDAQ Global Select Market



Exhibit Number	Description of Document
99.1	Press Release of GoPro, Inc. dated May 7, 2020 to report its financial results for its first quarter ended March 31, 2020.
99.2	Management's commentary from Nicholas Woodman, Chief Executive Officer, and Brian McGee, Chief Financial Officer and Chief Operating Officer, dated May 7, 2020 (furnished pursuant to Item 7.01).
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.



		GoPro, Inc.
		(Registrant)





Dated:	May 7, 2020	By: /s/ Brian McGee
		Brian McGee Chief Financial Officer and Chief Operating Officer (Principal Financial Officer)



	Three months ended March 31,
($ in thousands, except per share amounts)	2020			2019			% Change
Revenue	$	119,400		$	242,708		(50.8	)%
Gross margin
GAAP	32.2		%	33.1		%	(90) bps
Non-GAAP	34.2		%	34.2		%	—
Operating loss
GAAP	$	(56,114	)	$	(20,288	)	176.6	%
Non-GAAP	$	(46,654	)	$	(8,118	)	474.7	%
Net loss
GAAP	$	(63,528	)	$	(24,365	)	160.7	%
Non-GAAP	$	(49,613	)	$	(10,171	)	387.8	%
Diluted net loss per share
GAAP	$	(0.43	)	$	(0.17	)	152.9	%
Non-GAAP	$	(0.34	)	$	(0.07	)	385.7	%
Adjusted EBITDA	$	(41,356	)	$	(1,035	)	3,895.7	%


•	Revenue for Q1 2020 was $119 million, in-line with the preliminary results published on April 15, and down from $243 million for the same prior year period.


•	GAAP gross margin for Q1 2020 was 32.2%, slightly down from 33.1% year-over-year. Non-GAAP gross margin for Q1 2020 was 34.2%, flat from the prior year.


•	Q1 2020 GAAP net loss was $64 million, or $0.43 per share. Non-GAAP net loss was $50 million, or $0.34 per share.


•	Q1 2020 GAAP operating expenses of $95 million decreased 6% year-over-year. Q1 2020 non-GAAP operating expenses were $87 million, down 4% year-over-year. GAAP and non-GAAP operating expenses were at their lowest levels since 2014.


•	Adjusted EBITDA for the first quarter of 2020 was negative $41 million, compared to negative $1 million in the same period a year ago.


•	Cash and investments totaled $125 million at the end of Q1 2020.


•	GoPro.com represented a record percentage of revenue in Q1 2020 at 17%, up from 11% in Q1 2019.


•	Cameras with retail prices above $300 represented nearly 90% of Q1 2020 revenue, continuing a trend of consumers moving to our high-end cameras.


•	GoPro’s Plus subscription service ended Q1 2020 with 355,000 paid subscribers, up 14% sequentially and up 69% year-over-year.


•	Social followers increased by more than 1.3 million across all channels in Q1 2020 to more than 44 million, driven primarily by increases on Instagram, TiKTok and YouTube.


•	Organic viewership of GoPro content grew more than 40% both sequentially and year-over-year to a record quarterly high of 243 million organic, non-paid views in Q1 2020.


•	On April 15, GoPro announced Aimée Lapic, former Pandora and Banana Republic Chief Marketing Officer, as its Chief Digital Officer to lead direct-to-consumer growth initiatives.



	Three months ended March 31,
(in thousands, except per share data)	2020			2019
Revenue	$	119,400		$	242,708
Cost of revenue	80,973			162,361
Gross profit	38,427			80,347

Operating expenses:
Research and development	32,281			37,464
Sales and marketing	43,502			47,290
General and administrative	18,758			15,881
Total operating expenses	94,541			100,635
Operating loss	(56,114		)	(20,288		)
Other income (expense):
Interest expense	(4,843		)	(4,527		)
Other income (expense), net	(172		)	828
Total other expense, net	(5,015		)	(3,699		)
Loss before income taxes	(61,129		)	(23,987		)
Income tax expense	2,399			378
Net loss	$	(63,528	)	$	(24,365	)

Basic and diluted net loss per share	$	(0.43	)	$	(0.17	)

Weighted-average number of shares outstanding, basic and diluted	147,560			142,601



(in thousands)	March 31, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	117,435		$	150,301
Marketable securities	7,495			14,847
Accounts receivable, net	50,991			200,634
Inventory	172,022			144,236
Prepaid expenses and other current assets	24,942			25,958
Total current assets	372,885			535,976
Property and equipment, net	33,670			36,539
Operating lease right-of-use assets	51,086			53,121
Intangible assets, net and goodwill	150,384			151,706
Other long-term assets	15,013			15,461
Total assets	$	623,038		$	792,803

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	63,776		$	160,695
Accrued expenses and other current liabilities	97,543			141,790
Short-term operating lease liabilities	8,871			9,099
Deferred revenue	14,421			15,467
Short-term debt	30,000			—
Total current liabilities	214,611			327,051
Long-term debt	151,392			148,810
Long-term operating lease liabilities	60,351			62,961
Other long-term liabilities	19,186			20,452
Total liabilities	445,540			559,274

Stockholders’ equity:
Common stock and additional paid-in capital	938,372			930,875
Treasury stock, at cost	(113,613		)	(113,613		)
Accumulated deficit	(647,261		)	(583,733		)
Total stockholders’ equity	177,498			233,529
Total liabilities and stockholders’ equity	$	623,038		$	792,803


•	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.


•	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;


•	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;


•	other companies may calculate these non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures.



	Three months ended March 31,
(dollars in thousands)	2020			2019
GAAP gross profit as a % of revenue	32.2		%	33.1		%
Stock-based compensation	0.4			0.2
Acquisition-related costs	1.6			0.9
Non-GAAP gross profit as a % of revenue	34.2		%	34.2		%

GAAP operating expenses	$	94,541		$	100,635
Stock-based compensation	(7,134		)	(9,272		)
Restructuring and other costs	60			(287		)
Non-GAAP operating expenses	$	87,467		$	91,076

GAAP operating loss	$	(56,114	)	$	(20,288	)
Stock-based compensation	7,637			9,785
Acquisition-related costs	1,887			2,082
Restructuring and other costs	(64		)	303
Non-GAAP operating loss	$	(46,654	)	$	(8,118	)


•	Our flagship products will be primarily sold through gopro.com, alongside our entire portfolio of products, to super-serve consumers with expanded value that is only possible via a direct-to-consumer approach.


•	We will continue to sell our mid and entry-level products through select retailers and specialty stores.


•	We will expand our subscription offerings to provide outsized value to consumers while increasing their lifetime value to GoPro.


•	Accounts payable and accrued liabilities decrease of $141 million, offset by a decrease in accounts receivable of $150 million


•	Advertising, sponsorships, trade shows, public relations, point-of-purchase displays, activations, retail training and other areas totaling approximately $50 million;


•	Reduction in force and other payroll related reductions totaling approximately $40 million; and,


•	Office space, travel and other related expenses totaling approximately $10 million.