GoPro(GPRO) - 2024 Q3 - Quarterly Report

Financial Performance - GoPro reported Q3 2024 revenue of $258.9 million, a decrease of 12$294.3 million in Q3 2023[11]. - Gross profit for Q3 2024 was $91.8 million, compared to$94.2 million in Q3 2023, reflecting a gross margin of approximately 35.4%[11]. - Operating loss for the nine months ended September 30, 2024, was $95.9 million, significantly higher than the loss of$66.1 million for the same period in 2023[11]. - Total revenue for the three months ended September 30, 2024, was $258.9 million, a decrease of 12$294.3 million for the same period in 2023[61]. - Revenue for the nine months ended September 30, 2024, decreased to $600.6 million from$710.0 million in the same period for 2023[131]. - The company reported a net loss of $395.1 million for the nine months ended September 30, 2024, with cash used in operating activities amounting to$100.0 million[105]. - For the three months ended September 30, 2024, the company recorded a net loss of $8.2 million, compared to a net loss of$3.7 million in the same period of 2023[47]. - Adjusted EBITDA for Q3 2024 was $5.4 million, down from$7.2 million in Q3 2023[80]. Cash and Assets - Total current assets decreased to $454.6 million as of September 30, 2024, down from$482.6 million at the end of 2023[7]. - Cash and cash equivalents dropped to $130.2 million from$222.7 million at the end of 2023, indicating a cash reduction of 41.5%[7]. - GoPro's total stockholders' equity decreased to $183.9 million as of September 30, 2024, down from$555.8 million at the end of 2023[9]. - As of September 30, 2024, GoPro reported a cash balance of $130.2 million and an accumulated deficit of$644.4 million[17]. - Cash equivalents as of September 30, 2024, were $60.3 million, down from$152.8 million as of December 31, 2023[24]. - Total liabilities increased to $477.7 million as of September 30, 2024, compared to$412.1 million at the end of 2023, marking a rise of 15.9%[8]. Research and Development - Research and development expenses for Q3 2024 were $44.3 million, an increase of 6.4$41.7 million in Q3 2023[11]. - Total research and development expense for the first nine months of 2024 increased by $14.1 million, or 11.6$155.3 million, an increase from $106.3 million as of December 31, 2023[26]. - Camera units shipped in Q3 2024 totaled 881 thousand, compared to 923 thousand in Q3 2023, reflecting a 5$294, influenced by a 38.2% increase in entry-level camera sales[79]. Subscription and Services - Subscription and service revenue for Q3 2024 was $27.5 million, representing 10.6$79.7 million, or 13.3% of total revenue[18]. - The company launched its Premium+ subscription in February 2024, which includes 500 GB of cloud storage and access to advanced video stabilization software[18]. - Subscription attach rate was 45% in Q3 2024, with an aggregate retention rate for annual subscribers at 67%, up from 65% in the same period last year[80]. Cost Management and Restructuring - The company initiated a cost reduction effort in October 2024, aiming to reduce headcount by approximately 26% compared to Q2 2024[17]. - The restructuring plan approved in August 2024 aims to reduce the global workforce by approximately 26%, with expected severance-related charges of up to $9 million[63]. - The company expects to incur up to$8 million in project cancellation costs related to the restructuring plan approved in October 2024[91]. Market and Economic Conditions - The company continues to face pressures from inflation and fluctuating interest rates, which may impact product pricing and consumer spending[71]. - The company experienced a negative impact of approximately $50 million on revenue, gross margin, and net income due to foreign currency fluctuations over the last 12 months ending September 30, 2024[120]. - Economic downturns and inflation may adversely affect consumer spending and demand for products, impacting financial results[134]. Legal and Regulatory Risks - The company has initiated legal proceedings against Arashi Vision Inc. for patent infringement related to its cameras and digital imaging technology[150]. - The company is subject to evolving privacy and data protection regulations, with potential fines of up to 4$60.4 million as of September 30, 2024, under its stock repurchase program[168]. - The dual class structure may discourage potential investors from acquiring Class A common stock due to limited voting power compared to Class B[162].