GoPro, Inc. (NASDAQ:GPRO) Q4 2020 Earnings Conference Call February 4, 2021 5:00 PM ET Company Participants Christopher Clark - Vice President, Corporate Communications Nicholas Woodman - Chief Executive Officer Brian McGee - Chief Financial Officer and Chief Operating Officer Conference Call Participants Paul Chung - JP Morgan Andrew Uerkwitz - Oppenheimer & Company Jim Suva - Citigroup Investment Research Nik Todorov - Longbow Research Erik Woodring - Morgan Stanley Operator Good day and welcome to the Go ...

GoPro, Inc. (NASDAQ:GPRO) Wells Fargo 2020 Virtual TMT Summit Conference Transcript December 1, 2020 5:20 PM ET Executives Nick Woodman - Chief Executive Officer Brian McGee - Chief Financial Officer Analysts Bryan Briggs - Wells Fargo Bryan Briggs Good afternoon, everybody, and welcome again back to the Wells Fargo TMT Summit. We’re happy to have with us today GoPro, Nick Woodman, CEO; and Brian McGee, CFO. We were limited on time. So I want to really dive right into it. Guys, thanks for being with us here ...

Financial Data and Key Metrics Changes - GoPro generated non-GAAP EPS of $0.20 and $100 million of operating cash flow in Q3 2020, with expectations to be profitable for the full year 2020 [8][10] - Revenue growth of 109% sequentially, with record GoPro.com revenue of $81 million [10] - Estimated sell-through of approximately 955,000 cameras, exceeding expectations [10] Business Line Data and Key Metrics Changes - The launch of HERO9 Black and the GoPro subscription service contributed significantly to revenue and subscriber growth [9][10] - 85% of HERO9 Black purchases were made with a subscription, indicating a strong attach rate [21] - Higher average order values and accessory attach rates were observed among subscriber customers compared to non-subscribers [9][23] Market Data and Key Metrics Changes - The direct-to-consumer model is driving improved cash flow and margins, with expectations for continued growth in 2021 [10][25] - The company expects to exit 2020 with low channel inventory, positioning itself well for 2021 [10][56] Company Strategy and Development Direction - GoPro's strategy focuses on making the subscription service central to its business model, enhancing customer lifetime value and profitability [9][10] - The company aims to expand its direct-to-consumer approach, which is more profitable than retail channels [25][56] - Future product development will be informed by consumer research to address both existing user needs and attract new customers [46][48] Management's Comments on Operating Environment and Future Outlook - Management noted a shift in consumer behavior due to COVID-19, with increased local outdoor activities driving demand for GoPro products [15][16] - The company anticipates continued strong performance in Q4 and beyond, supported by a robust subscription model [10][42] - Management expressed confidence in the ability to grow the subscriber base significantly in 2021, with a target of nearly 2 million subscribers [22][42] Other Important Information - GoPro is focusing on enhancing the value of its subscription service to improve retention rates and reduce churn [50][52] - The company is developing a new app experience aimed at smartphone users, which could create additional subscription revenue opportunities [61][62] Q&A Session Summary Question: Change in business model and cash management - Management highlighted improvements in working capital, with DSOs improving to 35 days and expected to decrease further [12] Question: Changing demographics and market penetration - Management noted a shift in consumer behavior towards local activities, which has increased the relevance of GoPro products [15][16] Question: Subscriber attach rates through different channels - Higher attach rates were observed for subscriptions purchased through GoPro.com compared to retail [21] Question: Future cash flow modeling - Management indicated that cash flow seasonality has improved due to the direct-to-consumer model [34] Question: Operating expenses guidance for 2021 - Management expects operating expenses to be in the range of $290 million for 2021, with flexibility to adjust if necessary [39] Question: Subscriber growth expectations - Management anticipates exceeding 700,000 subscribers by year-end, with a potential to reach nearly 2 million by the end of 2021 [42] Question: New app experience for smartphone users - Management discussed plans for a new app that addresses widespread problems for both GoPro and smartphone users, aiming to expand the brand's reach [61][62]

Revenue Performance - Revenue for Q3 2020 was $280.5 million, a 114% increase compared to $131.2 million in Q3 2019[76] - Revenue for Q3 2020 was $280.5 million, a 114% increase from $131.2 million in Q3 2019, driven by the launch of HERO9 Black and increased demand for HERO8 Black[84] - Revenue from GoPro.com was $81.3 million in Q3 2020, representing 29% of total revenue, up from 17.8% in Q3 2019[84] - Total revenue for the first nine months of 2020 was $534.2 million, a 20% decrease from $666.3 million in the same period in 2019[82] Profitability and Income - Net income for Q3 2020 was $3.3 million, or $0.02 per share, compared to a net loss of $74.8 million, or $0.51 per share, in Q3 2019[79] - Operating income for Q3 2020 was $8.9 million, compared to an operating loss of $71.2 million in Q3 2019[82] - Adjusted EBITDA for Q3 2020 was $39.2 million, compared to a negative $52.7 million in Q3 2019[79] - GoPro reported a net income of $3.3 million for the three months ended September 30, 2020, compared to a net loss of $50.975 million for the previous quarter and a loss of $74.81 million for the same quarter last year[110] - Adjusted EBITDA for the quarter was $39.179 million, a significant improvement from an adjusted EBITDA loss of $22.367 million in the previous quarter and a loss of $52.715 million in the same quarter last year[109] Sales and Shipments - Camera units shipped in Q3 2020 totaled 923 thousand, a 93% increase from 479 thousand units in Q3 2019[77] - 83% of camera revenue in Q3 2020 came from products priced at $300 or more, compared to 77% in Q3 2019[79] - Average selling price of cameras in Q3 2020 was $304, reflecting a 10.9% year-over-year increase[79] - Average selling price in Q3 2020 was $304, an 11% increase compared to $274 in Q3 2019[84] Cost Management - Operating expenses decreased by $9.2 million, or 9.2%, year-over-year, due to cost management efforts[79] - Total operating expenses in Q3 2020 were $90.5 million, which is 32% of revenue, down from 76% in Q3 2019[82] - Sales and marketing expenses decreased by 30% to $34.4 million in Q3 2020 from $48.8 million in Q3 2019[88] - General and administrative expenses rose by 19% to $18.8 million in Q3 2020 compared to $15.8 million in Q3 2019[90] Research and Development - Research and development expenses for Q3 2020 were $37.2 million, accounting for 13% of revenue[82] - Research and development expenses totaled $37.2 million in Q3 2020, a 7% increase from $34.9 million in Q3 2019[87] - Total research and development expenses for the first nine months of 2020 were $104.1 million, a 6% decrease from $111.2 million in the same period of 2019[87] Cash Flow and Liquidity - Cash provided by operations in Q3 2020 was $99.6 million, a significant improvement from a cash used of $46.7 million in Q3 2019[77] - The company reported a net loss of $111.2 million for the nine months ended September 30, 2020, with cash used in operating activities amounting to $12.5 million[100] - As of September 30, 2020, GoPro's cash, cash equivalents, and marketable securities totaled $146.9 million, a decrease from $165.1 million on December 31, 2019[96] - The company anticipates that its current liquidity will be sufficient for at least one year from the issuance of the financial statements[99] Strategic Initiatives - The company plans to focus on direct-to-consumer sales to improve profitability and reduce operating expenses[81] - The shift to direct-to-consumer sales is expected to help achieve profitability despite a potential decrease in total addressable market[84] - GoPro's actions to shift to a direct-to-consumer sales model are expected to accelerate profitability and reduce operating expenses[99] - The company expects to increase sales from GoPro.com, which historically has a higher gross margin compared to retail sales[99] Restructuring and Costs - The company recorded restructuring costs of $26.6 million in Q2 2020, including $12.5 million related to asset impairment and $7.8 million for severance[92] - The company incurred $15.215 million in restructuring and other costs during the quarter, up from $11.351 million in the previous quarter[110] Market and Risk Factors - GoPro's foreign currency risk is currently considered immaterial, as the majority of product sales and inventory purchases are denominated in U.S. dollars[112] - Interest rate risk is primarily related to cash and cash equivalents, with the company holding investments in money market funds and U.S. treasury securities[112] - The fair value of GoPro's Senior Convertible Notes is subject to interest rate and market risks, but these do not impact the company's financial position or cash flows[112]

GoPro, Inc. (NASDAQ:GPRO) Citi's 2020 Global Technology Virtual Conference September 9, 2020 6:00 PM ET Company Participants Brian McGee - CFO Nicholas Woodman - CEO Conference Call Participants Jim Suva - Citi Jim Suva Hello, and welcome, everyone. Thank you for joining us here on Day 2 of Citi Technology's - our Citi Investment Research Global Technology Conference. I'm Jim Suva. I'm in charge of the IT hardware and technology supply chain analyst. I'm very pleased to bring to you in this fireside present ...

GoPro, Inc. (NASDAQ:GPRO) BMO 2020 Virtual Technology Summit Conference Call August 25, 2020 3:30 PM ET Company Participants Brian McGee - Executive Vice President, Chief Financial Officer and Chief Operating Officer Nicholas Woodman - Chairman and Chief Executive Officer Conference Call Participants Patrick Kratus - BMO Capital Markets Patrick Kratus Hi, everybody. Welcome to the GoPro Presentation. I'm Pat Kratus. I cover the technology and business services practice here at BMO. This is actually a very e ...

Financial Data and Key Metrics Changes - GoPro's revenue for Q2 2020 was guided to be between $220 million to $250 million, representing a 40% increase in revenue growth on gopro.com from Q2 [12][34] - The company expects gross margins to rebound to approximately 35% in Q3 and 38% in Q4, following a dip due to low revenue in Q1 and Q2 [17][34] - The company anticipates being close to breakeven for the year, with a potential for slight profitability [34] Business Line Data and Key Metrics Changes - Demand for GoPro cameras improved across all regions, with significant sales from the HERO8 Black model, which outpaced other models [11][14] - The company reported that 95% of sales were from products priced at $300 and above, indicating a shift towards higher-margin products [14][18] Market Data and Key Metrics Changes - GoPro's direct-to-consumer sales accounted for 44% of revenue in Q2, with expectations to maintain a range of 36% to 40% in Q3 [12][34] - The company saw a consistent improvement in sell-through rates globally, matching prior year levels by the end of June [11][12] Company Strategy and Development Direction - GoPro is focusing on a direct-to-consumer model to reduce operating costs and improve margins, which has shown positive results despite the pandemic [7][8] - The company plans to launch new hardware, software, and subscription offerings in the second half of 2020, aiming for continued growth in earnings [8][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for GoPro products, with expectations for continued growth into Q3 and Q4 [11][34] - The company is adapting well to the pandemic, with effective remote work practices and a robust product roadmap [25][34] Other Important Information - GoPro is expanding its product offerings to include lifestyle products and accessories, which are expected to contribute positively to average selling prices [27][30] - The company is enhancing its subscription service, GoPro Plus, with plans to increase the number of subscribers significantly by the end of the year [37][39] Q&A Session Summary Question: Improvement in demand by region - Management noted improvements in demand across all regions, with North America, EMEA, and Asia all showing positive trends [11] Question: Breakdown of demand by camera type - The HERO8 Black was the top performer, with 95% of sales coming from products priced at $300 and above [14] Question: Impact of direct-to-consumer on forecasting - Management indicated that forecasting has improved due to better data from retailers and direct sales [20][22] Question: New product development timeline amid COVID - Management confirmed that new product launches are on schedule, with effective remote work practices in place [24][25] Question: Free cash flow and guidance - The company expects to end Q3 with approximately $130 million in cash, with a potential for profitability [34] Question: GoPro Plus subscription attach rate - The attach rate for GoPro Plus is higher when customers purchase directly from gopro.com, and management plans to enhance this offering [35][37] Question: Webcam feature feedback - The webcam functionality for HERO8 Black has received positive feedback, with plans to enhance live streaming capabilities [41][60] Question: Inventory levels and future expectations - Management indicated that inventory levels are expected to stabilize around 500,000 to 600,000 units by the end of the year [49][50] Question: Fourth quarter competitive environment - Management acknowledged the competitive landscape but emphasized the advantages of the direct-to-consumer model in providing value to customers [57][58]