GoPro(GPRO) - 2020 Q3 - Quarterly Report

Revenue Performance - Revenue for Q3 2020 was $280.5 million, a 114$131.2 million in Q3 2019[76] - Revenue for Q3 2020 was $280.5 million, a 114$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$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$300 or more, compared to 77% in Q3 2019[79] - Average selling price of cameras in Q3 2020 was $304, reflecting a 10.9$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$34.4 million in Q3 2020 from $48.8 million in Q3 2019[88] - General and administrative expenses rose by 19$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$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$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]